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Baht/$ 33.50/55
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14,450
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ECONOMY
SOMRUEDI BANCHONGDUANG
Net capital flows posted a deficit of $3.8 billion in June for the first time in six months, primarily the result of selloffs of local assets by foreign investors.
The outflows have put pressure on the baht to weaken, acknowledged Amara Sriphayak, a senior director of the Bank of Thailand.
The baht yesterday was trading at 33.50/55 to the US dollar, down slightly from an average of 33.18 in January and compared with a monthly high of 31.46 in March.
Mrs Amara said the baht had been relatively stable compared with other regional currencies.
The latest economic data showed export values in June hitting a record of $16.145 billion, up 28.5% from the year before and compared with $15.29 billion the month before.
June imports stood at $15.2 billion, up 31.5% from the year before, resulting in a trade surplus of $926 million for the month, down from $1.26 billion the previous month. The current account posted a surplus of $722 million in June, up from a surplus of $631 million the previous month.
Private investment rose 0.7% in June compared with a 1.2% decline in May. On a year-on-year basis, investment slowed to 4.2% in June from 4.5% the previous month.
Mrs Amara said that private investment trends showed signs of improvement, with capital goods imports higher, particularly for electrical machinery and parts.
Consumption showed a small gain with 6.5% year-on-year growth in June compared with 6.3% in May.She said that while private spending rebounded slightly in the second quarter, consumer and business sentiment was hurt by rising prices.
Economic growth for the second half of the year would be affected by higher oil prices and inflation and global economic uncertainties due to the US sub-prime mortgage crisis.
Mrs Amara said inflationary pressure would affect business sentiment over the next three months. A business survey showed sentiment for short-term prospects at 44.2% compared with a normal level of 50%, pointing to concerns by businesses over inflation and oil.
Headline inflation reached a 10-year high at 8.9% in June, while core inflation, which excludes food and energy prices, was 3.6% year-on-year.
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