The Bank of Thailand is closely monitoring the US-Iran conflict near the Strait of Hormuz. Governor Vichai Ratanakorn noted that the baht's 5-6% depreciation is within normal limits and benefits Thailand's export and tourism sectors.
Vichai Ratanakorn, Governor of the Bank of Thailand, stated that the BOT has been closely and continuously observing the intensifying conflict near the Strait of Hormuz, as the situation is constantly evolving. The BOT's preliminary assessment is that if the conflict remains short-term and peace is restored soon, it will not require revisions to overall economic forecasts.
However, the BOT acknowledged the need for close vigilance, as an escalation causing a sharp and prolonged rise in global oil prices could pose risks to both inflation and Thailand's GDP. Currently, the BOT is not overly concerned, viewing the recent conflict and reports of a newly announced 20% toll as very recent developments occurring just 2-3 days ago. Therefore, it is too soon to clearly assess impacts on export figures and GDP for Q2 and Q3 this year. They await clearer developments and firm conclusions before making assessments.
Regarding baht stability and capital flows, the BOT reassures there is no particular concern. The baht has depreciated about 5-6%, moving in line with other regional currencies, with some countries experiencing more or less depreciation than Thailand. This is considered normal. The current depreciation level also serves as a positive factor supporting Thailand's export and tourism sectors.
"The current 5-6% depreciation of the baht acts as a supportive factor, helping to promote and drive growth in Thailand's export and tourism sectors," Governor Vichai said.
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