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Thailand Wrestles With Currency Woes

Wall Street Journal Original article ›

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Thailand's finance minister, Mr Kittiratt, says the capital inflows into Thailand are about three times more than the inflows before the 2008 global economic crisis. Surging investment in Thai government bonds because of higher interest rates in Thailand is leading to a stronger Thai currency. This makes Thai exporters less competitive than exporters in Vietnam and Malaysia.

Thailand's currency, the baht, and large capital inflows in 2013

05/29/2013

With the Thai economy dependent on exports the strengthening of the baht poses problems for exporters. Analysts estimates capital inflows into Thailand are now three times the level of inflows before the 2008 crisis. Higher interest rates in Thailand compared to Vietnam, Malaysia and other Asian countries are adding to the inflows. Capital controls have not worked in the past with sharp declines in the stock market and loss of investor confidence.

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