Thailand's policy of allowing the baht to float freely will be maintained under its new government, Prime Minister elect Yingluck Shinawatra said on Thursday. The Bank of Thailand broadly lets market forces determine the level of the baht, intervening only to prevent too much volatility.
Yingluck said the idea of a more controlled currency was not her party's policy, but Suchart Thada-Thamrongvech, a candidate for finance minister in the government led by Yingluck's Puea Thai Party, told Reuters this week Thailand should "steer and manage" the baht to keep the currency at "a competitive level".
He suggested that a flexible basket of currencies could be used to calculate the rate. Yingluck told reporters: "It's not our policy. It's just an initial analysis ... We are not intervening (in the baht). We will let it work under the current mechanism." She told the Wall Street Journal in an interview published on Thursday that the authorities would continue to let the baht appreciate against the dollar to limit imported inflation, and offset the inflationary impact of some of her party's policies.
Puea Thai, the party backed by self-exiled former Prime Minister Thaksin Shinawatra, won Sunday's election by a landslide, taking 265 of the 500 lower house seats. For the past decade, Thailand's minimum wage has trailed inflation, creating one of the widest gaps between rich and poor in Asia and fuelling working-class frustration that spilled over into violent street protests last year. Puea Thai has said it would change that by improving conditions for farmers, low-wage workers and young university graduates, in part by providing easy credit and lifting wages.