Weak baht 'driven by external factors'

Weak baht 'driven by external factors'

People shop at Bangkok's shopping area of Siam Square on July 2, 2022. (Photo: Pornprom Satrabhaya)
People shop at Bangkok's shopping area of Siam Square on July 2, 2022. (Photo: Pornprom Satrabhaya)

Thailand's weakening baht is being driven down by external factors and the central bank is closely monitoring the situation, Finance minister Arkhom Termpittayapaisith said, with the currency trading at its weakest level in more than five years against the dollar.

There were no large capital outflows from the debt market, Mr Arkhom told reporters on Wednesday.

On Tuesday, the Commerce Ministry reported that Thailand's headline inflation rate hit a near-14-year high in June, and price pressures will persist into the third quarter.

The Trade Policy and Strategy Office under the Commerce Ministry reported that headline inflation, gauged by the consumer price index (CPI), rose 7.66% year-on-year from June 2021, accelerating from 7.1% in May and 4.7% in April.

Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce (UTCC), said June's inflation spike stemmed largely from a continuous surge in energy prices, particularly diesel prices which rose to 35 baht per litre, and consumers' recovering purchasing power which was boosted by the country's full reopening and higher production costs.

He also predicted the inflation rate for the entire year to stay at 5.5-6.5%.

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