ASEAN KEY DESTINATIONS
Thai baht surges for now
The Bank of Thailand has sounded more uncomfortable lately about the local currency, but governor Prasarn Trairatvorakul says the gains are still in line with regional currencies. As a result, the central bank is not expected to introduce any new measures other than buying dollars in the near future.
The baht has risen by 3 percent against the dollar so far this month, as foreign investors have again become net buyers of local stocks. However, the baht has strengthened by just 0.4 percent against the greenback since the beginning of the year, the least among key regional currencies. The baht was trading late yesterday in Bangkok at 29.80/82 to the dollar, compared with 29.93.94 on Thursday.
Foreign capital has flowed into Asia on investors' renewed jitters about US economic prospects in light of the bleak job market, and a growing loss of confidence in debt-laden European economies.
The European Union on Thursday announced a set of bailout measures to avoid a default by Greece. They include an agreement to double the financial lifeline to 159 billion euros, including 50 billion from the private sector, and to extend the maturities of future lending to Greece.
Thailand's Commerce Ministry, meanwhile, announced this week that the dollar value of exports in June rose 17 percent year-on-year to US$21 billion, with imports up 26 percent to and $19.8 billion, while the trade surplus has been widening since April.
Benjarong Suwankiri, senior economist at TMB Analytics, said the baht was unlikely to strengthen beyond 29 to a dollar by year-end but would be increasingly volatile in line with uncertainty about the euro and the dollar.
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below