Baht hits seven-month high as foreign funds return

Baht hits seven-month high as foreign funds return

The baht advanced to below 32 to the US dollar yesterday, a seven-month high, as offshore funds continued to pour back into the Thai equities market.

The local currency rose to 31.92/31.94 to the greenback from 32.13/32.16 last Friday.

The baht has strengthened 2.75% this year, ranking fourth in terms of regional currencies after Indonesia's rupiah at 5.93%, Malaysia's ringgit at 3.6% and India's rupee at 2.81%.

Foreign exchange trader Peerawas Kositanon expects the baht's appreciation to continue and to test 31.70 next week.

The baht's movement is in line with that of regional currencies such as the ringgit, Singaporean dollar and South Korean won, he said.

Its strengthening could be ascribed to foreign investors' purchase of local bonds and stocks in an emerging market with growth potential.

The SET index yesterday edged up 0.34% to 1,538.55 points in brisk turnover of 52.2 billion baht. Foreign investors were net buyers of 558 million baht. They have bought 17.1 billion baht this month but taken out 24 billion from the Thai stock market year-to-date.

Spokeswoman Roong Mallikamas said improved confidence in Asian markets following clearer developments in the Indonesian presidential election was among the factors contributing to the baht's appreciation. Another factor is improved forecasts of economic growth.

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