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Bank of Thailand intervened to slow baht volatility

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Bank of Thailand intervened to slow baht volatility

By Satawasin Staporncharnchai

 

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FILE PHOTO: Thailand's central bank is seen at the Bank of Thailand in Bangkok, Thailand April 26, 2016. REUTERS/Jorge Silva/File Photo

 

BANGKOK (Reuters) - Thailand's central bank said on Wednesday it intervened to slow volatility in the baht so that it would not affect economic recovery.

 

Progress in developing coronavirus vaccines, news of economic recovery last month and a depreciating U.S. dollar had affected currencies in the region, Assistant Governor Vachira Arromdee said in a statement.

 

The baht was affected by external factors and the central bank came in to ensure that volatility did not impact economic adjustments, she said, adding that the Bank of Thailand would continue to closely monitor markets.

 

The baht strengthened to a one-year high, at 29 baht per U.S. dollar, early on Wednesday, before returning to around 30 baht later in the day.

 

Thai exporters on Tuesday called on the central bank to ensure that the baht did not appreciate beyond 30 baht per U.S. dollar, saying it would hurt competitiveness.

 

"It's speculative forces from foreign investors, so the central bank had to come in," said Jitipol Puksamatanan, head of markets strategy at SCB Securities.

 

The Thai economy shrank 6.4% in the third quarter after a slump of 12.1% in the preceding quarter.

 

"Exporters should see this is as a warning that the dollar could weaken," he said.

 

The central bank last month also intervened to rein in the currency.

 

(Reporting by Satawasin Staporncharnchai and Chayut Setboonsarng, additional reporting by Anushka Trivedi; editing by Ed Davies, Larry King)

 

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-- © Copyright Reuters 2020-12-10
 
  • Author

Central bank blames rapidly weakening dollar for stronger baht

By The Nation

 

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The weakening dollar has seen regional currencies appreciate quickly, with China’s yuan its highest for two and half years, the Korean won and Singaporean dollar strongest in three years, and the new Taiwan dollar at a 23-year high.

 

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Availability of Covid-19 vaccine coupled with signs of global economic recovery in November have caused the US dollar to weaken rapidly, Bank of Thailand (BOT) assistant governor Vachira Arromdee said on Wednesday. The dollar fell to a two-year low against the baht of Bt30.023 on Wednesday, according to BOT figures.Since November, the baht has risen 3.5 per cent, the won 4.5 per cent and Indonesia’s rupiah 3.9 per cent.

 

Year-to-date, the baht had actually weakened slightly, Vachira noted.

 

The central bank was closely monitoring currency rates and it would prevent the baht’s value from impacting the economic recovery, she added.

 

The central bank has introduced a slew of measures to encourage capital outflow in order to balance increasing capital inflows that are driving the baht up.

 

Thai exporters are complaining that the strong baht makes their products more expensive and less competitive in the global market.

 

Source: https://www.nationthailand.com/business/30399368

 

 

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-- © Copyright The Nation Thailand 2020-12-10
 
  • Popular Post

Same message with the 2016 file photo the baht has an unexplained full metal jacket impervious to bad news ????

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So much for the American tourists next year then !

They blame the weakening Dollar, yet they also confess that “speculative forces from foreign investors” drive the Baht up.

This begs the question: why won’t central bankers identify these nefarious foreign investors?  For clues, we should look for large economies with rising currencies, I think.

  • Popular Post
5 hours ago, sammieuk1 said:

Same message with the 2016 file photo the baht has an unexplained full metal jacket impervious to bad news ????

You mean full Teflon jacket? 

Lets see what happens after December 18 when CP completes their purchase of Tesco. A lot of baht to move out of the country if they have not already done so.

The Elite dream coming to completion 

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