Thai government agrees on steps to stabilise currency

Bangkok, July 20 (UNI) The Thai government, under growing political pressure to rein in the sharply appreciating baht that has raised fears of a rerun of the economic crash of 1997, has agreed on a set of measures to stabilise the currency.

After an emergency meeting with economic ministers and top officials of the central bank this morning, Prime Minister Surayud Chulanont approved the measures proposed by a private sector panel.

The details would be announced after the Cabinet meeting next week, Deputy Prime Minister and Industry Minister Kosit Panpiemras said.

Yesterday's announcement of the central bank allowing ordinary Thai nationals to keep US-dollar bank accounts of up to 100,000 dollars might be included. Exporters would also be allowed to hold their dollar earnings much longer.

One of the measures announced today was a 5 billion Baht public-private sector soft-lending fund to assist small and medium businesses in the country.

The rising Baht has cast a shadow on Thailand's export-driven economic growth. The recent closure of a garment exporting company resulting in 5000 workers being laid off became a front page news and led to initiating of a drastic action by the government to manage the currency more effectively.

Yesterday, the military-appointed interim parliament witnessed heated debate on the sharp rise in the currency with the central bank coming under flak for the mismanagement of the exchange rate.

In the past few weeks, the Thai currency strengthened to its highest level since July 1997 when the Bank of Thailand was forced under attack from foreign speculators to abandon the fixed exchange rate, triggering Baht's free fall to historic lows and the subsequent Asian financial crash.

UNI