A study conducted by the UBS Group – the largest Swiss banking institution – showed that Thailand is a candidate for currency manipulation under the standards set by the US Treasury Department.
However, the Bank of Thailand refuted the possibility of entering the US financial watchlist, stating that it hasn’t manipulated the Thai baht to gain a trade lead.
The US Treasury set the criteria required to be listed under the financial watchlist, as follows:
- A country has at least a USD20 billion trade surplus with the US
- The trade surplus constitutes at least two percent of the country’s gross domestic product (GDP)
- A consistent one-sided intervention with the country’s currency equating to two percent of the GDP tracked under half a year
If a specific country has fulfilled two out of the three criteria set, the US Treasury will list the said nation under its currency manipulation list.
Thailand wasn’t listed on the January US financial list.
However, the recently conducted UBS analysis states that Thailand has now fulfilled all the criteria set by the US Treasury. UBS officials said:
“Thailand […] crossed the USD$20 billion trade surplus mark to make it to the list.”
The financial authorities also added:
“We expect Thailand’s inaugural mention in the upcoming report.”
The UBS report, released on July 21st, also found:
- The wrecking of covid-19 on the nation’s economy may hamper the Bank of Thailand on buying US Dollars until next year
- The Thailand bank has intruded in the currency affairs, registering 10 out of the 12 months through the course of 2019
The central bank of Thailand, on the possible mention in the US list, affirmed:
“The Bank of Thailand has always reiterated that our transactions in the foreign exchange market have no objective in distorting the baht’s value to gain a trade advantage against Thailand’s partners. This is reflected in the baht’s movement during the previous period, when it moved in a two-way direction, appreciation and depreciation, rather than moving in either direction.”
Source: Bangkok Post