Baht breaks 29-per-dollar barrier
The baht jumped the most in 10 months, breaching 29 per dollar for the first time since 1997.
- Published: 9/04/2013 at 06:15 PM
- Newspaper section: breakingnews
Baht is gold... or so it seemed Tuesday as the currency broke the barrier of 29-per US dollar briefly, for the first time since 1997.
Demand for the nation's bonds rose amid unprecedented monetary easing in Japan. Stocks dropped to a two-month low.
The currency jumped 1 per cent from its April 5 close to 29.02 against the greenback as of 4:51 p.m. in Bangkok after reaching 28.93 earlier, according to data compiled by Bloomberg. That's the biggest advance since June 4.
Tuesday's baht gains were "too fast" and the Bank of Thailand is ready to intervene if the currency's moves are not consistent with fundamentals, Governor Prasarn Trairatvorakul said. Capital controls are not being considered, he added.
Global funds bought $292 million more Thai government debt than they sold last week, adding to net purchases of $9.6 billion in the first quarter, official data show. That compares with $31 billion for the whole of 2012.
"With floods of cash in Japan where rates are so low, investors are seeking higher returns and in this region, Thailand looks good thanks to its stable economy and political situation," said Tsutomu Soma, manager of Rakuten Securities Inc's fixed-income business unit department in Tokyo. "And the weaker yen won't be harmful for Thailand as it doesn't compete with Japan, unlike South Korea or China."
The baht has strengthened 5.3 per cent this year versus the greenback, the biggest gain among Asia's 11 most-used currencies, according to data compiled by Bloomberg. It reached 28.93 earlier today, the strongest level since a devaluation in 1997 that sparked the Asian financial crisis.
About the author
- Writer: Bloomberg News
- Position: News agency