Baht hits 8-day low
- Published: 12/02/2013 at 09:36 AM
- Online news:
The baht dropped Tuesday to its lowest in more than a week on speculation the Bank of Thailand will cut interest rates next week to slow fund inflows that helped fuel a 2.3 per cent rally in the currency this year. Bonds fell.
Finance Minister Kittiratt Na-Ranong said Jan 25 that lower interest rates would discourage inflows into the country. He urged the central bank to employ measures to prevent the baht from rising or falling sharply.
There is concern the strong baht will hurt tourism and exports, he said Jan 31. The Bank of Thailand is to review interest rates on Feb 20.
"There's some pressure from the Thai government on the central bank to cut interest rates next week," said Kozo Hasegawa, a foreign-exchange trader at Sumitomo Mitsui Banking Corp. in Bangkok. "Still, because of the Chinese New Year holidays, trading is quiet."
The baht fell 0.2 per cent to 29.89 per dollar as of 8:19am Tuesday, the biggest decline since Jan 31, according to data compiled by Bloomberg.
One-month implied volatility, a measure of expected moves in exchange rates used to price options, decreased two basis points to 5.45 per cent.
About the author
- Writer: Bloomberg News
Position: News agency