Thailand, the epicenter of the 1997 economic crisis, called for global cooperation to cope with financial volatility following a regional stock sell-off sparked by Wall Street losses. Speaking on July 28, a day after the Thai stock tumbled over 2%, Thai Finance Minister Chalongphob Sussangkarn said the world should boost efforts in tackling volatilities in the stock and currency markets.
"The issue of managing exchange rates and capital flows is one of the most important economic issues facing Thailand today," he said, adding that "a solution to effectively cope with financial volatilities cannot be achieved through separate national policies."
"We need concerted regional and global cooperation," the former World Bank economist said at a central bank conference in Bangkok.
Apart from the volatile stock market, Thailand is trying to curb the baht, which has remained at 10-year highs against the dollar since early July on the back of massive capital inflows. The strong baht has alarmed Thailand's government as it put pressure on its export-driven economy, which was already in a slump due to political uncertainty following a coup in September 2006.
Chalongphob said Thailand had capital inflows worth more than one billion dollars in July alone. "This inflow has really tested the ability of the authorities to manage the exchange rates," the minister said.
The government last week approved a raft of measures aimed at weakening the baht, but Thailand's Prime Minister Surayud Chulanont warned on July 27 that the local currency would see more fluctuations ahead
Copyright Agence France-Presse, 2007