NEWS,HOT NEWS,22.Mar.2012.,17.41

Comment: 

By Daniel Ten Kate and Susan Li

March 22 (Bloomberg) -- Thailand’s government would like to see lower interest rates and a weaker currency to help exporters cope with higher energy costs, Finance Minister Kittiratt Na-Ranong said.Thai-based companies faced difficulties shipping goods when the baht approached a level of 30 per dollar, he said in aninterview with Bloomberg Television today in Hong Kong. Exportsfell more than expected in January as factories struggled to resume production after the worst flooding in almost 70 years and as global demand weakened. “Those companies have been adjusting themselves and improved their efficiency in order to barely survive,” Kittiratt said. “So the range of 32 to 34 would be very good.” The Bank of Thailand yesterday joined central banks from Australia to South Korea in keeping interest rates unchanged as higher energy costs boosted inflation risks. Kittiratt’s comments add to pressure for policy easing in Thailand, where exports and manufacturing have contracted in the aftermath of flooding last year that disrupted global supply chains.

“Thailand is similar to other countries suffering from cost-push inflation because of higher energy costs that come out of the tension in the Middle East,” he said. “If the central bank would agree to let the interest rate down a little bit further, that would be good.” The baht declined 0.1 percent to 30.77 per dollar as of 2:44 p.m. in Bangkok, according to data compiled by Bloomberg. It has strengthened about 2.5 percent this year, making it the third-biggest gainer in Southeast Asia after the Malaysian ringgit and the Singapore dollar. “I don’t think the BOT will yield to government pressure,” Frances Cheung, a strategist at Credit Agricole CIB in Hong Kong, said by phone, referring to the Bank of Thailand. “They have their own mandates and I don’t think the BOT will just target any level for the baht. As you can see from the BOT’s tone, they are primarily focusing on inflation and economic activity.” For Related News and Information:

Top economic stories: TOP ECO <GO> Stories on Thai rice exports: NSE THAI RICE EXPORTS <GO> Most-read stories on Thai economy: MNI THECO <GO> Thai GDP historical data: THGDPYOY <Index> HP <GO> Economists’ Thai interest-rate predictions: BYFC THB CB <GO> Top Southeast Asia stories: ATOP <GO> Central bank actions: STNI CENTRALBANKACT <GO> --With assistance from Yumi Teso in Bangkok. Editors: Tony

Jordan, Rina Chandran

To contact the reporters on this story:

Daniel Ten Kate in Bangkok at +66-2-654-7318 or

dtenkate@bloomberg.net;

Susan Li in Hong Kong at +852-2977-6424 or

sli31@bloomberg.net

To contact the editor responsible for this story:

Stephanie Phang at +65-6499-2617 or

sphang@bloomberg.net