BANGKOK: -- The government should have a clear policy towards amending financial and business laws to boost foreign investor confidence in investment in Thailand, according to a leading economist.

Speaking at an annual academic seminar held by the Fiscal Policy Office, Supavud Saicheua, managing director of Phatra Securities, said he saw a need for any government to clarify amendments to the laws, particularly the Foreign Business Act (FBA).

Currently, he said, legal advisors to foreign investors are not daring to advise foreign investment in Thailand because they are uncertain about the future direction under the amended FBA.

He said the former opposition Democrat Party had earlier stated it would not amend the FBA if entrusted to form the next government because it viewed the contents of the existing act as sound already.

Similarly, he said he thinks the new government should have a clear stance towards the amending the FBA.

Dr. Supavud also predicted that the Bank of Thailand's Monetary Policy Committee would further cut the policy interest rate to boost the overall economy if the US Federal Reserve decided to reduce key interest rates.

He viewed the short-term interest rate could be further cut by 0.25-0.50 per cent.

Narongchai Akrasanee, chairman of the board of executive directors, Export-Import Bank of Thailand, said the new government must give an importance to the supervision of the currency exchange rate because the past currency volatility had caused wide-ranging impacts on many parties.

At present, there is no financial law that requires Thailand's Ministry of Finance and the central bank to work more closely together.

So, it is necessary for both agencies to push for the passage of a financial law in the National Legislative Assembly, he said.

--TNA 2007-09-18