About economics & international trade
Capital outflows rising on possible US stimulus, for all regional currencies so Thailand not alone.
During the past month, the baht has done this, compared with the benchmark US dollar. The inset shows the closing value of the baht on Thursday evening.
INTERNATIONAL TRADE & FINANCE
Baht weakens to three-year low
Capital outflows rise on Fed stimulus concerns
The baht fell below 32 to the US dollar Thursday, a three-year low, while the stock market sank at one point to its lowest intraday level since last November.
Capital outflows are rising after the minutes from last month's US Federal Reserve meeting showed officials support a stimulus easing this year should the US economy improve.
The local currency slid to its weakest level since August 2010, the first time it dipped below 32 since July 2012, said Bloomberg. The baht fell to 32.09/32.13 to the greenback and has dropped about 5% this year.
Other Asian currencies struggled, with the ringgit falling to its lowest level in more than three years, the Philippine peso weakening to a two-month low, Indonesia's rupiah diving to its lowest level since April 2009 and India's rupee slumping to an all-time low.
The rupiah fell by 0.4% to 10,818 to the dollar, while the rupee slid to 65.56.
Fresh worries over the Fed tapering its monthly asset-buying programme and a series of weak economic data from emerging countries have caused foreign investors to unload stocks and bonds in these markets and flee to major economies such as the US and Japan.
The SET index plunged to the day's low of 1,325.78 points Thursday before late buying stabilised the market, closing at 1,351.81 for a 0.25% drop in active trade worth 57.9 billion baht. The index has lost 7.4% the past six trading days.
Foreign investors were net sellers of 3.58 billion baht worth of Thai shares Thursday, raising net sales this month to 34.2 billion and year-to-date to 110 billion for this segment
The Philippine Stock Exchange was the biggest loser in the region, tumbling to a five-year low as the local market resumed trading after a three-day closure It dipped 6.9% during trading before paring losses to 5.96% at the close.
Pongpen Ruengvirayudh, a deputy governor of the Bank of Thailand, said the central bank will take necessary steps if the baht continues to depreciate at a faster pace
But the baht remains in line with other regional currencies that experienced similar capital outflows, she said. The difference has been the speed of depreciation, as the baht faces higher volatility risk
Concerns over growing fund outflows is one reason the central bank' s Monetary Policy Committee (MPC) maintained its policy rate at 2.5% even as economic growth is slowing.
Mounting worries that the Fed will pare its easing policy at next month's meeting and disappointing Thai numbers stoked demand for the dollar, said one trader at a local bank.
"Investors who earlier bet the dollar would soon reverse its upward trend and shorted the greenback rushed to cut their losses after the dollar broke past 32, adding to the significant retreat of the baht today," said the trader, adding that the baht could continue to weaken, with resistance of 32.20 and support at 32.
Jumpon Saimala, the chief executive of CIMB-Principal Asset Management, estimates the SET could recover by 10-15% by year-end due largely to demand for long-term equity funds and retirement mutual funds for personal income tax deductions
He said government spending, especially on megaprojects, will drive a recovery
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asset: something owned by a person, company etc., particularly money and property - ทรัพย์สิน
bet: to risk money on a race or an event by trying to predict the result - พนัน
bet: used to say that you are almost certain that something is true or that something will happen - กล้าคาดคะเน
broke past: to move past something suddenly and quickly -
capital: a large amount of money that is invested or is used - ทุน, เงินทุน
central bank: the main government bank in a country that controls the supply of loans (credit) and the supply of money in the country and provides financial services to the government and other banks - ธนาคารแห่งชาติ
closure: the shutting down of a school, factory or other business or service - การปิด
concern: a worry - ความกังวล
currency: the system of money that a country uses - เงินตรา
cut losses: take action to limit the money lost, limit losses -
data: facts or information, especially when examined and used to find out things or to make decisions - ข้อมูล, ตัวเลข, สถิติ
deduction: the process of taking an amount of something, especially money, away from a total, in this case taxes; the amount that is taken away - การหักลบ
demand: the need and desire of people to buy goods - อุปสงค์
depreciate: when a country's currency loses value compared to the currencies of other countries, making exports cheaper and more competitive -
deputy: a person whose rank is immediately below that of the leader of an organisation - รอง
dip: going downwards or to a lower level - การตกลง, การลดลง
dive: to move or jump quickly in a particular direction, especially to avoid something, to try to catch a ball, etc -
drive: to force something to go in a particular direction or into a particular position by pushing it, hitting it, etc - ตี, ผลัก,ผลักดัน
due to: because of - เนื่องจาก
ease: decrease, fall -
emerge: to appear or to become recognised - โผล่ออกมา
equity: stock shares - หุ้นทุน
experience: to have something happen to you or to live through some event - ประสบการณ์
Federal Reserve: the US central bank, also called the "Fed" -
flee: to leave a place or person quickly because you are afraid of possible danger - หนี อพยพ
fund: money provided for something - เงินทุน กองทุน
fund: investment fund, money collected together to invest in companies or projects -
governor: a person who is chosen to be in charge of the government of a state or province - ผู้ว่าการรัฐ, ผู้ว่าราชการจังหวัด
greenback: the US dollar bill - ธนบัตรของสหรัฐอเมริกา
growth: economic growth, an increase in economic activity - การเติบโต
income tax: the percentage of the money that a person or corporation earns that they pay to the government as tax - ภาษีเงินได้, ภาษีรายได้
index: a number that shows the price, value, or level of something compared with something else - ดัชนี
intra: (adjective) within, inside, between - ภายใน
investor: a person or organization that invests money, i.e., uses money with the aim of making a profit from it, for example by buying property or buying shares in a company - นักลงทุน
local: in this country (Thailand) -
long-term: that will last or have an effect over a long period of time - ระยะยาว
maintain: to keep something at the same level or state and not change it -
minutes: a summary or record of what is said or decided at a formal meeting - รายงานการประชุม
monetary policy: the policy of the central bank of a country to control the supply of loans and money in the economy - นโยบายการเงิน
mounting: increasing - ที่เพิ่มขึ้น
mutual fund: an investment fund that invests in a wife range of stocks and bonds, etc, the fund is divided into small units that are bought and sold, usually by people who invest only a small amount of money, in the UK called a "unit trust" -
net: a final amount, after everything has been subtracted or taken away -
official: someone with an important position in an organisation - เจ้าหน้าที่
pace: the speed at which something happens or is done - อัตรา
pare: reduce -
paring losses: reducing losses -
personal: your own; not belonging to or connected with anyone else - เป็นส่วนตัว
plunge: to fall quickly from a high position - ดิ่งลงมาจากท้องฟ้า
policy rate: the interest rate set by the central bank as part of its monetary policy controlling the amount of loans and money in the economy -
recover: to become normal and healthy again - ฟื้นฟูสภาพ
recovery: the process of becoming normal and healthy again - ฟื้นฟูสภาพ
regional: of or relating to a region - เกี่ยวกับภูมิภาค
resistance: opposition to some or something - การต่อต้าน
resume: to begin again after stopping for a period of time - เริ่มอีกครั้ง, กลับมาอีกครั้ง
retirement: the time when you stop working, especially because of old age - เกษียณอายุ
retreat: to move back or away - ถอยกลับ
reverse: to change and stop going in one direction and go in the other - เปลี่ยนแปลง
ringgit: the currency or money used in Malaysia -
risk: the possibility that something dangerous or unpleasant might happen - ความเสี่ยง
rush: to move or do something very quickly - รีบเร่ง, วิ่ง
segment: a part of something - ตอน
short: when someone sells financial assets (stocks, bonds, currencies, etc) they do not yet own, in the hope that their price will fall and they will make a profit by buying them later at a lower price -
significant: large or important enough to have an effect or to be noticed - ซึ่งมีความหมาย
slide: decrease, fall -
slump: to fall suddenly - ตกต่ำมาก
stabilise: to reach a state where there are no longer any major changes or problems - ทำให้มีเสถียรภาพ
stimulus: a set of programmes, especially government spending programmes, designed to start an economy growing again - แผนกระตุ้นหรือฟื้นฟูเศรษฐกิจ
stock exchange: a place where shares in companies are bought and sold; all of the business activity involved in doing this - ตลาดหลักทรัพย์
stoke: make stronger, increase - stoke the fire
struggles: experiences difficulty and makes a very great effort in order to do something - ดิ้นรน
support: preventing something from falling down or decreasing -
taper: reduce or grow smaller slowly and gradually -
trade: the buying and selling of goods and services - การค้าขาย
trend: a gradual change or development that produces a particular result - ทิศทาง แนวโน้ม
tumble: to fall down - ล้ม,ล้มลง,ตกลง,หกคะเมน
unload: sell the things that you have so that you don't have them anymore -
volitility: a condition when changes suddenly or becomes more dangerous - ที่ปะทุได้ง่าย