CIMBT forecasts weaker baht in Q2

CIMBT forecasts weaker baht in Q2

CIMBT forecasts the baht to move in a range of 31.50-32.50 against the greenback in the third quarter before weakening in the fourth quarter.
CIMBT forecasts the baht to move in a range of 31.50-32.50 against the greenback in the third quarter before weakening in the fourth quarter.

CIMB Bank Thai (CIMBT) forecasts a weaker baht this quarter, weighed down by persistent foreign capital outflows following US policy rate hikes.

CIMBT's research house predicts that the local currency will retreat to 32.50 against the US dollar this half from 31.90 now, as foreigners sell off their Thai bonds and equities, said head of research Amonthep Chawla.

The US Federal Reserve is expected to continue tightening its monetary policy with two more hikes this year after jacking up its rate twice so far.

The speculation has triggered a capital flight from bond and stock markets globally to the US.

Mr Amonthep forecasts the baht will move in a range of 31.5-32.5 against the greenback in the third quarter before weakening in the fourth.

The baht is expected to hit 32 against the dollar by year-end, he said in a seminar at the 2018 Money Expo, which runs through Sunday.

CIMBT has relaunched fixed-deposit accounts in US dollars with a rate of up to 2% per year.

The account requires a minimum deposit of US$2,000 (63,743 baht) and a maximum of $5 million. The deposit campaign is available until the end of May.

CIMBT targets 100 such deposit accounts amounting to 20-30 million baht.

The bank also plans to launch foreign currency deposit accounts, said senior executive vice-president Adisorn Sermchaiwong.

At the Money Expo, the state-owned Government Savings Bank (GSB) is offering a special step-up savings rate of up to 9%.

CIMBT's executive vice-president Bhudinan Sethanandha said deposit competition in the banking industry is expected to intensify next half in line with loan demand and a ramp-up in public and private investment under the government's infrastructure investment plan.

"The attractive deposit rate offered by GSB at the Money Expo indicates fund mobilisation in preparation for loan growth, propelled by government projects," he said.

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