Thailand's baht traded near a 17-month high as overseas investors increased holdings of the country's assets, spurred by an improving outlook for Southeast Asia’s second-largest economy. Government bonds were steady.
Global funds bought US$3.4 billion more sovereign notes than they sold this month through yesterday and poured a net $409 million into local equities, Thai Bond Market Association and stock exchange data show. The Bank of Thailand raised its 2013 economic growth forecast on Jan. 18 to 4.9 percent from an October estimate of 4.6%. Central bank Governor Prasarn Trairatvorakul said on Tuesday that volatile capital flows are the main threat to growth, and the monetary authority is ready to act should there be "unusual movement."
With pretty good risk sentiment, funds have been flowing into the region and that is helping boost currencies," said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc in Tokyo. "However, dealers and investors seem sensitive to intervention risks as some central banks in Asia, including Thailand, show concern about rapid appreciation."
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