Bangkok: The Governor of the Bank of Thailand stated that the tariff affects both the export group, import group, and SME group. He believes that it is an important opportunity for long-term adjustment. Whether or not it will adjust GDP depends on the results of the negotiation between Thailand and the United States. He emphasized that monetary policy does not only include adjusting interest rates.
According to Thai News Agency, Mr. Sethaput Suthiwatanaruput, Governor of the Bank of Thailand (BOT), talked about the impact of the US retaliatory tariffs that we are now starting to see the results of negotiations from various countries, reflecting that it is important for Thailand to negotiate to a clear conclusion. When the details are released, various measures must be implemented to support it, taking into account the mitigation of the economic impact, finding ways to provide relief to those affected, and the most important thing that we should not neglect is how to adjust for the future. Mostly, we focus on the short term and forget about the long term. This time, it is an important opportunity for us to adjust, not just focusing on export figures and investment figures.
In the case of Indonesia being charged a 19% tariff and Vietnam being charged a 20% tariff and not charging imports from the United States, each country must look at its own situation. However, it is seen that at this time, many details are still unclear, especially the issue of international transportation of goods (Transshipment), which will have a significant impact. For example, Vietnam does not yet have clear details on what will be considered a Transshipment, which will have a significant impact on investment and Thailand. Therefore, we must wait for clear details.
The impact of the Tariff will come from many channels, both export product groups. If we negotiate to open the market, it will affect the group that has reduced import taxes. Another group that the BOT is concerned about is the group affected by the flood of goods entering Thailand because they cannot be exported to the US, such as clothing, furniture, and electrical appliances, which are mostly SMEs. Therefore, they are highly vulnerable when compared to the industrial group that exports goods to the US, which has a higher proportion of multinational companies.
The measures to support the impacts that will occur must be a collaboration of all sectors, both government, private, business and financial sectors, which must face each other. We have been discussing continuously, not just talking in the short term, but looking to long-term adjustments. As for whether there will be a review of the economic forecast, we will have to wait for the results of the negotiations of the Thailand team.
As for the talk about adjusting interest rates and the baht, it is considered normal to have to prepare for the overall economic assessment. He also emphasized that monetary policy does not only concern interest rates.
Regarding the difficult access to credit and the call for the BOT to adjust the criteria for requesting credit, Mr. Setthaput said that the criteria for accessing credit did not come from the BOT. It is admitted that there are groups of businesses that cannot access credit, but mainly because of the risk that financial institutions and commercial banks consider to be high risk and therefore do not grant credit. The solution must be addressed at the root cause, which is risk, such as loan guarantees through the mechanism of the SME Bank or other mechanisms to help improve access to credit. However, it is believed that there may need to be a review of whether the proportion of guarantees is appropriate or not, given the current increased risks.
However, it is believed that the problem is not only the monetary policy, but also the competitiveness, so we must adjust to increase our competitiveness because if the business cannot compete, it would be impossible to provide loans to solve the problem. However, if we increase our competitiveness, we believe that financial institutions will be ready to provide loans.