BANGKOK: - The weakening of Thai baht against the US dollar is likely to stay put for a longer period than earlier anticipated and importers are advised to resort to currency hedging to protect their business.
Mr Chow Kengchon, managing director of the Kasikornthais research centre, said Wednesday that the baht currency would continue to remain weakened against the US dollar due to uncontrollable external factor. Nevertheless, he said such a situation would not pose a business disadvantage as long as the Thai baht remains weak in the same level like other currencies in the region.
Mr Thiti Tantikulanant, an executive in capital market business of Kasikornthai Bank, suggested importers to secure currency hedging to reduce the risk for exchange fluctuation as the baht currency is likely to fluctuate until next year.
He anticipated the baht to weaken to 36.75 baht per US dollar at the end of this year as it was speculated that the US Federal Reserves would increase the interst rate by 0.25 basis points during a meeting on September 16-17.
The weakened baht currency corresponds with economic fundamentals and some sectors may be affected such as the importers and out-bound tour operators but the effects will be manageable, said Mr Kobsak Phutrakul, assistant president of Bangkok Bank.
Even if the US have not raised their rate of interest as they may have done on the 17th of September meeting it is still possible and maybe likely that they raise it on their next meeting which should make the weakening of the THB to the USD going on at least for a while as investors will take money of Thailand to the US as it would be more rewarding financialy with a higher rate of interest.
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Weakening of the Baht
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BANGKOK: - The weakening of Thai baht against the US dollar is likely to stay put for a longer period than earlier anticipated and importers are advised to resort to currency hedging to protect their business.
Mr Chow Kengchon, managing director of the Kasikornthais research centre, said Wednesday that the baht currency would continue to remain weakened against the US dollar due to uncontrollable external factor. Nevertheless, he said such a situation would not pose a business disadvantage as long as the Thai baht remains weak in the same level like other currencies in the region.
Mr Thiti Tantikulanant, an executive in capital market business of Kasikornthai Bank, suggested importers to secure currency hedging to reduce the risk for exchange fluctuation as the baht currency is likely to fluctuate until next year.
He anticipated the baht to weaken to 36.75 baht per US dollar at the end of this year as it was speculated that the US Federal Reserves would increase the interst rate by 0.25 basis points during a meeting on September 16-17.
The weakened baht currency corresponds with economic fundamentals and some sectors may be affected such as the importers and out-bound tour operators but the effects will be manageable, said Mr Kobsak Phutrakul, assistant president of Bangkok Bank.
Source: http://englishnews.t...lar-at-year-end
Even if the US have not raised their rate of interest as they may have done on the 17th of September meeting it is still possible and maybe likely that they raise it on their next meeting which should make the weakening of the THB to the USD going on at least for a while as investors will take money of Thailand to the US as it would be more rewarding financialy with a higher rate of interest.