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https://www.nationthailand.com/thailand/economy/40020677

Thailand’s monetary policies independent of moves by US Fed, BOT governor clarifies

MONDAY, OCTOBER 03, 2022

THE NATION

The Bank of Thailand (BOT) has ruled out pegging the baht’s value to the US dollar, and clarified that Thailand’s financial policies do not necessarily follow those of the United States as both countries have totally different economies.

BOT Governor Sethaput Suthiwartnarueput pointed out on Monday that the US Federal Reserve’s policy of raising interest rate frequently should not be applied to Thailand, as that would only make the baht stronger than other currencies in this region.

To combat inflation, the Fed has raised policy rate five times this year — from 0.25 to 3.25 per cent as of September 21.

Meanwhile, the BOT has raised the policy rate twice this year, once on August 10 from 0.50 to 0.75 per cent and by another 25 basis points on September 28 to 1 per cent.

Monetary Policy Committee (MPC) secretary Piti Disyatat said last week that the committee had voted to raise the policy rate because the Thai economy was still recovering, driven by the tourism sector and spending by the private sector, while inflation was still high.

The US Fed still has two meetings left this year — on November 2 and December 14 — at which the policy rate is expected to be further raised to 3.75 and then 4.25 per cent, respectively. The MPC has only one scheduled meeting left this year, on November 30.

Some experts have expressed concern that since the MPC has only one chance left to adjust the rate this year while the US has two, Thailand would eventually be unable to adjust its policy in accordance with the US’s new rate. To this, Sethaput responded: “If the situation does change, we could hold an extraordinary meeting of the MPC to adjust our rate accordingly. There is no law barring an additional meeting of the MPC.”

“Besides, the global markets are already accustomed to the Fed’s policy trend this year, therefore the impact from its future rate adjustment should be minimal,” he added.

Sethaput added that Thailand’s economy is in the recovery phase after the pandemic and is expected to bounce back to pre-Covid level by early next year.

“The BOT will ensure a smooth takeoff for our economic recovery and is keeping an eye out for factors that could hinder this endeavour, especially the rising inflation rate and lack of continued support from financial institutions to business operators.

THE NATION

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https://www.nationthailand.com/thailand/economy/40020673

Govt lab tasked with monitoring quality of Thai kratom products

MONDAY, OCTOBER 03, 2022

THE NATION

The Agriculture Ministry has decided to get kratom products checked at the government-owned Central Lab Thai before they are shipped out.

Sakul Kiatjeeravirat, an adviser to the agriculture minister, said a stamp of approval from the Central Lab would add value to exported kratom products and ensure importers of the quality.

He added that the Agriculture Ministry is helping farmers grow kratom (Mitragyna speciosa) so it can be turned into herbal products for export. The herb, which has stimulating properties, has been removed from the national narcotics list.

He said kratom could become a new cash crop, generating a lot of income for the country as the active substances in the leaves can be used in medical products, cosmetics, food and beverages.

Sakul said the Agriculture Ministry has assigned the Central Lab to check the quality and amount of extract used in the products. He added that the lab has the precision tools required for the job and that importers had recently visited the lab to observe the process.

Sakul said the ministry will soon launch a system of random checks, so kratom products can get a certificate of analysis.

The lab’s managing director Chakrit Tiebtienrat said they had acquired new equipment this year in response to the rising demand for quality checks on herbal, ganja, hemp and kratom products.

He said the lab could check the level of mitragynine and 7-hydroxymitragynine in leaves before the substances are extracted for use in medical products or in food or drink.

The Central Lab Thai was set up on June 17, 2003, under a Cabinet resolution. The Finance Ministry owns 49 per cent of the lab, while the rest is owned by the Office of SMEs Promotion under the PM’s Office.

Rikruelee Jeweh, the chief business adviser for Deena Farm Co Ltd, said his firm has been monitoring the government’s policies regarding kratom with interest because the demand for the leaves is high in the Middle East.

At present, only Indonesia and Malaysia have been exporting kratom to the Middle East, but now that the herb has been decriminalised here, Thai exporters can also enter the market.

He said Thai kratom is loaded with the active ingredient mitragynine, which will boost its demand in the Middle East.

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https://www.nationthailand.com/thailand/economy/40020666

Cross-border trade, rice deals with China on new DFT chief’s agenda

MONDAY, OCTOBER 03, 2022

THE NATION

The new Department of Foreign Trade (DFT) director-general said he will promote cross-border trade and government-to-government rice deals with China to help rebuild the economy in the fallout of the Covid-19 pandemic.

Ronnarong Phoolpipat, who was recently appointed as DFT director-general, said on Monday that the agency’s most important agenda is to boost cross-border trade, as its value rose to 1.15 trillion baht in the first eight months of 2022, rising 3.18 per cent year on year.

“Cross-border export rose slightly at 0.11 per cent to 682.84 billion baht, while imports rose 7.98 per cent to 471.02 billion baht. In August, Thailand ran a trade surplus of 211.82 billion baht,” he said.

Ronnarong, who previously oversaw the Trade Policy and Strategy Office, said a weakened baht and recovering Myanmar and Laos economies were the main factors boosting cross-border trade this year. The rising demand for energy alone has expanded Thailand’s exports to Myanmar and Laos by 100 and 115 per cent year on year respectively.

He added that as the Covid-19 situation improves, consumption and manufacturing in the region is also bouncing back. In the first eight months of 2022, Malaysia has imported 389.42 per cent more automobiles and 131.43 per cent more tyres from Thailand compared to the previous year. Cambodia, meanwhile, has imported 618.91 per cent more circuit boards and 93.41 per cent more fabric and yarn.

“The DFT will also focus on G2G contracts to sell rice to China under the Thailand-China highspeed rail cooperative framework,” he said. “Under the contract, China will purchase 2 million tonnes of rice from Thailand. So far 720,000 tonnes have already been shipped. The DFT will work with the Chinese government to push for the rest of the shipment as soon as possible.”

Ronnarong added that his agency will also support exporters in their effort to find new buyers, especially in Malaysia, Singapore, the Philippines, Iraq and Saudi Arabia.

“The department will also review AD [anti-dumping] laws to ensure trade is done in compliance with the latest international standards to protect our markets,” he added.

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https://www.nationthailand.com/thailand/economy/40020665

BOT to monitor loan campaigns by commercial banks to prevent aggravation of household debt situation

MONDAY, OCTOBER 03, 2022

THE NATION

The Bank of Thailand (BOT) on Monday vowed not to let the household debt situation worsen by making sure that commercial banks would refrain from launching campaigns that would encourage unnecessary borrowing by consumers.

BOT Governor Sethaput Suthiwartnarueput said the central bank would seek to tackle the issue of high household debt with sustainable measures by making sure that commercial banks don’t create distorted motives for loans.

“We must make sure that commercial banks would not create a moral hazard related to household borrowings,” Sethaput said.

Ronadol Numnonda, deputy BOT governor in charge of financial institutions’ stability, said the central bank would not allow commercial banks to launch loan products and commercial campaigns that would encourage people to borrow for unnecessary consumption.

Ronadol said the central bank would issue regulations to control unnecessary borrowings in the first quarter of next year.

He said commercial banks would be told to consider funds available with the borrowers for their daily lives apart from considering their ability to repay their debt.

He added that the central bank has been trying to reduce household debt, which had been accumulating even before the Covid-19 pandemic.

Governor Sethaput added that the central banks has adjusted measures for taking care of debtors in vulnerable groups because the household debt was still as high as 88-89 per cent of gross domestic product (GDP) after it peaked at 90 per cent during the Covid-19 pandemic. During the pandemic, household debt rose by 10 per cent, he said.

He said the Bank for International Settlements suggested that household debt should not be higher than 80 per cent of GDP.

“The household debt is an issue that has been with us for a long time. There is no magic pill for curing it. It takes time to solve it, but the debtors must survive,” Sethaput said.

As one of the measures for addressing household debt, the BOT on September 3 last year asked commercial banks to restructure household debt so that they could paid back over a longer period in keeping with the debtors’ ability to repay the debt.

“Without this measure, the economy might have been disrupted,” Sethaput said.

He added that the central bank’s attempt to control household debt was one of the measures it was using to make sure the slow recovery of the country’s economy would not be disrupted. Another measure was to control the rising inflation through gradual hikes in policy interest rate in accordance with the economic situation, Sethaput said.

Meanwhile, Mathee Supapongse, BOT deputy governor in charge of monetary stability, said the central bank found that low-income people and labourers had the most household debt.

He said this group of people saw their income reduced during the Covid pandemic so the central bank would come up with specific measures to help them.

The central bank has reported that at the end of the second quarter this year, the amount of household debt rose to 14.76 trillion, but its ratio to GDP declined from 89.2 per cent in the first quarter to 88.2 per cent in the second quarter.

Household debt rose 3.5 per cent year on year, the lowest increase in 18 years, and the growth rate slowed down from 3.7 per cent year on year in the first quarter.

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https://www.nationthailand.com/thailand/economy/40020653

Royal Cliff Hotel CEO calls for more government assistance to boost tourism

MONDAY, OCTOBER 03, 2022

THE NATION

A hotel operator in Pattaya has urged the government to launch measures that would support the country’s tourism industry after the Covid-19 crisis.

Royal Cliff Hotels Group CEO Vitanart Vathanakul said the Eastern Economic Corridor policy to promote Chachoengsao, Chonburi and Rayong as world-class tourist destinations would help attract foreign investment.

He added that some of the the government’s policies, such as Long Term Residency (LTR) visa personal income tax waiver, also would help attract foreign investors to eastern provinces.

“Some foreign investors also took the opportunity to hold conferences in the eastern provinces, especially in Pattaya City,” he said.

He said Royal Cliff Hotels Group has renovated its hotels to be ready for tourism to recover and adjusted the management strategy to maintain the employment of its 600 staff.

“Currently, the group’s occupancy rate has risen to around 50-60 per cent compared to 70-80 per cent before the Covid-19 pandemic,” he said.

However, he said the number of foreign visitors in Pattaya has dropped, especially travellers from China, Russia and Ukraine where internal problems exist.

He expected China to allow its residents to travel overseas after October, adding that the group is ready to offer promotion campaigns to attract Chinese tourists to Pattaya.

Vitanart also urged the government to launch tourism stimulus measures, especially among domestic tourists.

“For instance, the “Rao Tiew Duay Kan” (We Travel Together) tourism stimulus scheme should be extended until 2023,” he said.

“Meanwhile, the government should provide financial support for organising conferences and seminars in the country which would benefit other industries as well.”

He also asked the government to launch marketing campaigns to boost awareness of Pattaya’s image, as the city has changed a lot since the Covid-19 crisis.

“These campaigns would help attract high income tourists to visit the country,” he added.

THE NATION