(Bloomberg) -- Thailand rejected claims that it engages in unfair currency practices to gain a trade advantage, even as the nation appears close to meeting U.S. criteria on exchange-rate manipulation.
In fact, the central bank faces criticism for doing too little to curb gains in the baht, the strongest performer in Asia this year, according to Commerce Minister Apiradi Tantraporn. Countries that aim to boost overseas sales normally prefer weak currencies to make their goods cheaper.
"I don't think manipulation is what we have been doing, what we have been practicing," Apiradi said in an interview at her office near Bangkok.
Thailand is at risk of meeting U.S. Treasury criteria of unfair currency practices because of its near $20 billion bilateral trade surplus, a robust current-account balance and rising foreign-exchange reserves. The nation also falls under President Donald Trump's executive order to probe countries responsible for the largest U.S. trade imbalances.
The U.S. treasury typically releases its semiannual report on foreign-exchange policies of major trading partners in April and October. The criteria to determine currency manipulation and Thailand's position are as follows:
Treasury Criteria | Thailand |
| Minimum $20 billion trade surplus with U.S. | $19 billion surplus in 2016 |
| Minimum 3% of GDP current-account surplus | 10.6% of GDP in second quarter |
| Net foreign currency purchases of at least 2% of GDP in 12 months | Over 5% of GDP, HSBC estimated in a report in September |
Apiradi said Prime Minister Prayuth Chan-Ocha's meeting with Trump in Washington this month had bolstered the relationship between the two countries.
The trip helped to "bridge the gap" after the relationship deteriorated in the past decade, she said in the interview last week. Both nations agreed to form a new mechanism to sort out future trade issues.
Click to read: U.S. and Thailand Push Trade and Security to Promote Asia Peace
Ties cooled under President Barack Obama after former army chief Prayuth seized power in a coup in 2014. Last week, the military government said elections will be held in November 2018.
Exports of goods and services account for about 70 percent of Thailand's economy, and the U.S. is the nation's third-largest trading partner. The baht has surged more than 8 percent against the dollar this year.
--With assistance from Supunnabul Suwannakij
To contact the reporter on this story: Sunil Jagtiani in Bangkok at sjagtiani@bloomberg.net.
To contact the editors responsible for this story: Linus Chua at lchua@bloomberg.net, Nasreen Seria at nseria@bloomberg.net, Karl Lester M. Yap, Andrew Janes
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