Baht touches one-week low
- Published: 11/02/2013 at 10:32 AM
- Online news:
Thailand's baht fell to a one-week low on Monday morning on speculation the central bank will take action to stem the flow of foreign money into local assets. Government bonds advanced for an eighth day.
Overseas investors have bought US$1.2 billion more sovereign notes than they sold this month through Feb 8, Thai Bond Market Association data show. Finance Minister Kittiratt Na-Ranong said on Jan 31 there’s concern the strong baht, which has rallied 2.5% against the dollar this year, will hurt tourism and exports. The Bank of Thailand may unveil measures to curb foreign inflows at a meeting on Feb 20, according to Disawat Tiaowvanich, a currency trader at Bangkok Bank Plc.
"There's demand for the dollar against the baht because the market is cautious that the central bank may do something to slow down the capital inflows," Tiaowvanich said. "That's why the Thai baht hasn’t moved on the strong side these days."
The baht fell 0.1% to 29.82 per dollar as of 8.29am in Bangkok, according to data compiled by Bloomberg. The currency touched 29.94 earlier, the weakest level since Feb 1. One-month implied volatility, a measure of expected moves in exchange rates used to price options, rose two basis points, or 0.02 percentage point, to 5.62%.
Overseas shipments, which account for about two-thirds of Southeast Asias second-largest economy, rose 14% in December after a 27% increase the previous month, official data showed on Jan 31.
The yield on the 3.625% government bonds due June 2023 declined one basis point to 3.54%, data compiled by Bloomberg show.
About the author
- Writer: Bloomberg News
Position: News agency