Finance Minister Arkhom Termpittayapaisith has offered reassurance that Thai financial institutions will not be affected by the banking debacle in the US and Europe as local organisations have little exposure to such banks.
He discussed the matter with the Bank of Thailand and found local institutions' transactions with those banks were worth only 2 million baht.
Thailand implemented stricter supervision of local institutions following the 1997 Asian financial crisis, strengthening the system for financial institutions, he said at a seminar on Wednesday hosted by the Thammasat Economics Association.
The Bank of Thailand said on Monday it expects a limited impact to the country's financial system from the problems besetting banks in the US and Europe. The central bank is continuing to monitor the situation.
According to the central bank, at the end of 2022 Thailand's banking system had a capital adequacy ratio of 19.4%, higher than the minimum requirement of 8.5%, a liquidity coverage ratio of 197% and a non-performing loan (NPL) coverage ratio of 172%. The NPL ratio was at a low level of 2.73%, said the regulator.
Mr Arkhom said communication with the public is key to stemming panic, a process the central bank is continuing to provide.
He said the local stock exchange has been affected by the panic, but this is limited to the short term.
One factor affecting the Thai economy is the global economic slump, which limits exports, said Mr Arkhom. The sector needs to look for new markets, especially in Asean.
He said the authorities should monitor the baht's movement as the US Federal Reserve is set to consider a rate hike this week. The baht is hovering at 33-34 per US dollar, stronger than late last year.
Mr Arkhom said the government can still use stimulus packages to drive economic growth momentum.
He said he believes the economy can expand 3-4% this year. A higher rate would require more investment, particularly by the state, said Mr Arkhom.
Last year private investment expanded 6% year-on-year, he said.
The country's management efforts should focus on ensuring a balance between fiscal and monetary policies, promoting new business models, and investment in high-growth enterprises and clean energy, said Mr Arkhom. The country also needs to revamp its revenue structure by seeking new revenue sources.
There should be greater spending on developing human resources and education, shifting from utility infrastructure, he said.
