Top Thai Banker: Economy Will Be OK
BANGKOK, Thailand (AP) _ Thailand’s central banker predicted Thursday the nation’s economic prospects would suffer little even if the currency keeps sliding amid fears of a worsening regional recession.
Chatu Mongkol Sonakul spoke to reporters as the currency, the baht, which had been stable for several weeks at about 39 to the dollar, closed at 42.45, trading from 42.20 at Wednesday’s close.
``If the baht is traded between 40 baht and 45 baht, our economy will be able to handle it,″ Chatu Mongkol said. ``It is OK for the exchange rate to move, as long as it doesn’t move too quickly.″
The currency has been weakening since last week when Thailand and the International Monetary Fund, which is overseeing a $17.2 billion bailout of the economy, agreed the country’s recession would be deeper and longer than previously thought.
The economy is now expected to shrink as much as 5.5 percent this year, compared with previous estimates of 3.5 percent.
The baht has lost some 40 percent of its value since it was floated last July following a failed defense against currency speculators. The move triggered a regional economic meltdown.
Thai share prices ended 1.8 percent higher Thursday after the Bank of Thailand, the central bank, announced details of a debt restructuring plan that will allow banks to set aside smaller reserves, encouraging talks with borrowers on whittling down problem loans.
The Stock Exchange of Thailand index closed up 5.60 points to 318.81.