BANGKOK - Thailand's cabinet on Tuesday approved loan measures worth 260 billion baht ($8.61 billion)to help small and medium-size companies, affected by weak exports amid global trade tensions and a strong currency, a finance ministry official said.

That includes soft loans worth 195 billion baht and 65 billion baht in loan guarantees to be arranged by state banks, Lavaron Sangsnit, head of the finance ministry's fiscal policy office, told a briefing.

The government also offers tax breaks and fee reductions to help SMEs in debt restructuring, he said.

Thailand, Southeast Asia's second-largest economy, relies on exports, which have been hit by the U.S.-Sino trade war. Strength in the baht, which rose nearly 9% against the U.S. dollar in 2019, has added to the pressure.

Earlier on Tuesday, a Thai shipping association said exports might contract 5% this year if the baht gained more than forecast against the U.S. dollar.

($1 = 30.18 baht)

(Reporting by Kitiphong Thaichareon, writing by Orathai Sriring, editing by Larry King ) ((orathai.sriring@thomsonreuters.com; +662 0802309; Reuters Messaging: orathai.sriring.thomsonreuters.com@reuters.net))