Baht likely to weaken, says BoT deputy governor

Baht likely to weaken, says BoT deputy governor

FILE PHOTO: Mathee Supapongse, a deputy governor of the Bank of Thailand, is pictured in 2015. (Photo supplied)
FILE PHOTO: Mathee Supapongse, a deputy governor of the Bank of Thailand, is pictured in 2015. (Photo supplied)

The baht is likely to weaken on more foreign selling, a lower current account surplus and reduced dollar-related gold trading flows, a deputy governor of the Bank of Thailand (BoT) said on Wednesday.

Market sentiment has changed and foreign investors now think the baht, Asia's top performing currency this year, may not rise much further because its strength is already much beyond the country's fundamentals, Mathee Supapongse told reporters.

"That makes the baht not a safe haven as it was before," he said. "It is moving more on a downward trend after a one-way rise earlier."

The BoT’s two interest rate cuts this year have also eased upward pressure on the baht by making the Thai yield curve the lowest in Southeast Asia and less attractive, Mr Mathee said.

Still, the baht has appreciated 7.5% against the US dollar so far this year, hurting Thai exports, a key growth driver.

The gold trade had helped push the Thai currency to a six-year-high as traders who had exported gold repatriate their dollars back to exchange the proceeds for baht.

The Bank of Thailand remains concerned about the strength of the baht and is ready to take action against any rapid gains, either through intervention or additional steps, Mr Mathee said.

On Wednesday, the central bank, the Federation of Thai Industries and commercial banks discussed how to handle the baht's strength, he said, without giving further details. 


Do you like the content of this article?
COMMENT (7)

Pattaya comes alive as thousands flock to Koh Lan

CHON BURI: Pattaya City buzzed with tourists on Saturday as thousands flocked to Koh Lan, a popular tourist destination in this resort town, during the three-day holiday period that began on Friday.

12:48

China frees Canadians after Huawei CFO leaves

In a sudden resolution to a diplomatic crisis between the US, China and Canada, a top Huawei Technologies Co executive flew home as China released two jailed Canadians.

12:02

Heavy rain alert in most parts till Sunday

Heavy rain, flooding and strong winds in 39 provinces in the North, the Northeast, the East and the Central Plains, including Bangkok, on Saturday and Sunday as tropical storm Dianmu weakened.

11:41