Economy

RMB move to help economic recovery: Thai central bank

(Xinhua)
Updated: 2010-06-22 14:14

BANGKOK - China's decision to make RMB's exchange rate more flexible will help boost the global economic recovery, the Thai News Agency (TNA) on Tuesday quoted Thailand's central bank as saying .

Beijing's move should be seen as justifiable because China's economy is now very strong and expanding steadily with the current account balance enjoying a substantial surplus, Deputy Governor of the Bank of Thailand (BoT) Bandid Nijathaworn said, quoted by TNA.

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The decision to increase the flexibility of the RMB serves as an adjustment of the economic policy toward the economic fundamentals of other countries, Nijathaworn said.

"Adopting the policy to make the RMB's exchange rate more flexible is tantamount to giving the currency an opportunity to strengthen, which will help boost global economic recovery. Strengthening of RMB will make other currencies in the region including Thai baht appreciate accordingly," he said.

If all currencies in the region strengthen simultaneously, concerns over the pros and cons of the baht's appreciation or depreciation against other currencies could be ruled out, he said.

It meant, the deputy governor said, Thailand would not lose its export competitiveness in terms of currency value because currencies of the country's rivals had also appreciated in the same direction as the baht.

In contrast, entrepreneurs in other Asian countries including Thailand, and major industrialized countries will benefit from the RMB's flexibility because they could export more goods to China, helping ease the trade imbalance with China in the long run, he said.