KBANK chief downplays concern on weaker baht

BANGKOK: -- The weakening of the baht for this moment will be in the short run and should not be of concern since the country’s balance of payment remains sound, according to a top banker.

Prasarn Trairatanaworakul, President of Kasikornbank Plc, said the balance of payment looked strong because foreign investors had brought a huge amount of money to invest in the Stock Exchange of Thailand since late last year.

They had just sold some shares to adjust their investment portfolio in the past 1-2 weeks. So, it was normal to see the baht weaken against the US dollar for now.

He said most analysts shared the common view the dollar would weaken against Asian currencies in the medium term because the United States still experienced a high deficit in the current account.

But last week, the dollar strengthened since new data on the US economy showed the employment had improved. So, many were optimistic the fuel price hike had little impact on the US economy and believed the dollar would not weaken as earlier expected.

However, in his opinion, the US economy continued to be pressed by the current account deficit, said Dr. Prasarn.

On the government’s decision to raise diesel prices by 3 baht per liter, he said it would somewhat affect the country’s economic growth.

Still, the KASIKORN Research Center projected the economy would continue to grow 5-5.2% this year on the assumption that diesel prices surge by 5-6 baht per liter.

The leading think tank believed the inflation rate would stay at 3% as loans in the banking system would grow 6-8%.

It forecast the interest rate hike would occur in the second quarter of this year at the latest.

--TNA 2005-03-29

It's getting weaker by the day, I would be concerned if I were him.

I predict 42 next few months...$ is getting stronger.

On the government’s decision to raise diesel prices by 3 baht per liter, he said it would somewhat affect the country’s economic growth.

ok

Britmaverick - on what basis do you a predict a stronger $ over the

next few months ?? I can`t see that with the ongoing deficit

and Iraq not any showing any real sign their expenses there

can be halted in the near future ??

Britmaverick - on what basis do you a predict a stronger $ over the

next few months  ?? I can`t see that with the ongoing deficit

and Iraq not any showing any real sign their expenses there

can be halted in the near future ??

<{POST_SNAPBACK}>

Maybe the point is that the Baht will be even weaker than the US$ hence 42 to $

aybe the point is that the Baht will be even weaker than the US$ hence 42 to $

It is always a safe bet, to predict that the Baht will continue to decline. When you have a gov that is obsessed with export driven growth and has taken measures to restrict trading in the Baht. What they need to watch out for is the increase in fuel costs, that will be excacerbated by a weaker baht.