Thailand's baht touched a 16-year high after global funds boosted holdings of local bonds amid signs policy makers will refrain from curbing capital inflows that have fueled the regions best exchange-rate rally.
Central bank governor Prasarn Trairatvorakul, who on April 19 said the currency has started to move beyond fundamentals, and Finance Minister Kittiratt Na-Ranong have ruled out capital controls. The baht has advanced 7% this year, beating a 1.9% gain in India's rupee and 0.8% in China's yuan. Foreigners bought $2 billion more Thai sovereign debt than they sold this month through April 19, adding to net purchases of $9.8 billion in the first quarter, official figures show.
Inflows into bonds are continuing to put appreciation pressure on the baht, said Tohru Nishihama, an economist covering emerging markets at Dai-ichi Life Research Institute Inc. in Tokyo. They seem to be tolerant in general with the appreciation and are unlikely to introduce any tough measures.
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