The Bank of Thailand says it still needs to monitor the trade conflict between the United States and China closely although the country will be slightly affected.
Mr Veerathai Santiprabhob, the central bank governor, said that although the impact of the US China trade conflict on the national economy will be minimal, it still needs to be closely monitored.
He said indirect repercussions such as the entry of restricted goods into the local market would directly compete with local suppliers and severely chip away at their market share.
Similarly, he said that the situation was also a potential windfall for Thai products that will have reduced competition in both the US and China markets.
With regards to US targeting Thailand for alleged exchange rate manipulation, an official explanation is being formulated to clarify Thailand’s position to US officials.
Commenting on a proposal by the Finance Minister for commercial banks to lower interest rates for SMEs the governor stated that in the past this was possible because of the availability of funding. He went to explain that currently interest rates on loans for SMEs was already very low due to intense competition among commercial banks to attract SME clientele.
Therefore he said competitive SMEs therefore had nothing to be worried about.
The problems of less healthy SMEs however cannot be solved with soft loans alone as structural internal concerns must be solved first in order for them to become competitive.
Thailand’s net interest rate is at mid level slightly higher than in Singapore and Malaysia but lower than Indonesia and the Philippines, he said.