Thai Baht May Hit 13-Year High On Fund Inflows

[webfact]

Baht may hit 13-year high on fund inflows

By THE NATION, BLOOMBERG

Thailand has witnessed a continued increase in net capital inflows, expected to keep the baht on the appreciation path probably to a level unseen since 1997.

According to the Bank of Thailand, in July, net capital inflows were worth US$2.7 billion (Bt84 billion), which went to all parts of the economy, including $987 million to non-bank business.

Mathee Supapong, director of the central bank's domestic economy department, said inflows to the non-bank sector were either foreign direct investment or investment in the stock market. The banking sector attracted only $571 million, mostly short-term financing and some as investment in banking shares through the stock market.

London-based Barclays predicts that the baht may strengthen to levels not seen since 1997 over the next year as accelerating growth encourages foreign investors to keep pouring money into the nation's assets.

The baht could appreciate 1 per cent to 31 per US dollar over three months, 1.8 per cent to 30.75 in six months and 2.6 per cent to 30.50 in a year, Singapore-based economist Rahul Bajoria wrote in a research report. In January, the bank forecast that the baht would advance to 31.75 in a year.

"We expect the baht to enjoy continued trend appreciation, as the external position remains robust," Bajoria wrote. "Strong inflows into local-currency bond and equity markets, along with current-account surpluses, should generate further upward pressure on the currency."

Last month, the baht advanced 3.2 per cent, its biggest monthly gain since February 2008. According to Bloomberg, it advanced to 31.29 per dollar.

"There will be more willingness on the part of the central bank to let the currency appreciate," Bajoria said. "The appreciation is going to be in line with regional currencies, so it's not going to harm the competitiveness of the external sector."

Mathee said the Bank of Thailand had no specific level where the baht would go, but would maintain equilibrium with regional movements. This should limit negative impacts on exporters.

The currency drew support from government data showing that growth in gross domestic product in the first two quarters, at 12 per cent and 9.1 per cent, was the best since 1995.

According to the Bank of Thailand, the economy in July kept expanding, though at a slower rate than in the previous month. While private consumption, exports and manufacturing slowed because of sharp growth in the first half, tourism showed continued recovery. In the month, Thailand welcomed 1.25 million visitors, up 14.9 per cent year on year, while the hotel occupancy rate stayed at 46.9 per cent compared with 37.3 per cent in the previous month.

Private investment rose 22.1 per cent year on year, mostly in the electronics, electric-appliance, automobile and construction sectors. Private consumption rose 5.1 per cent on-year, while exports at $15.48 billion rose 21.2 per cent. Industrial manufacturing expanded 16.3 per cent, down from 21.9 per cent in June. Inflation in the month accelerated on higher fresh-food prices and higher industrial and retail employment.

The central bank is widely expected to raise the policy rate again next month to 2 per cent.

-- The Nation 2010-09-01

[rametindallas]

It's amazing how well Thailand is doing with an honest (relatively speaking and with a dash of salt) government at the helm. Mr. Korn is acknowledged by many to be doing an outstanding job. I can only guess where the economy and optimism would be if there had been no Spring demonstrations and violence. I can only hope this government gets serious about raising all the citizen's standard of living. The rich in Thailand would be rich in Dallas; they have enough.

[gotlost]

Today 30.82 USD 47.19 GBP 39.05 EUR

[khunjake]

Today 30.82 USD 47.19 GBP 39.05 EUR

Those rates that TV is using in the upper right hand corner for USD/THB appear to be the offshore rate. Onshore rate shows 31.214 as of 9:20am Bangkok time

[Murf]

Today 30.82 USD 47.19 GBP 39.05 EUR

It's too strong already for my liking!

[damian5000]

Siam Commercial busted into the 20's. Currently at 29.97

[Ayutthaya69]

Today 30.82 USD 47.19 GBP 39.05 EUR

It's too strong already for my liking!

Yes Murf for me to its not really good for Thailand Strong Baht next week i have to go for my Visa ED in Penang buth i dont go the plane verry expensive so best option go to Lao by Train more cheaper so The Thai Baht will Killed some Business and manny country make business whit Vietnam Lao Cambodia

[Naam]

Siam Commercial busted into the 20's. Currently at 29.97

that's for cash and small notes. once the transfer rates show the "2" in front we will hear some real outcry.

http://www.scb.co.th/scb_api/index.jsp

[Pib]

Today 30.82 USD 47.19 GBP 39.05 EUR

Those rates that TV is using in the upper right hand corner for USD/THB appear to be the offshore rate. Onshore rate shows 31.214 as of 9:20am Bangkok time

As noted on the TV page, the rates are "mid market rates." Mid market rates are derived from mid-point between the buy and sell rates of many global currency transactions. This mid-market rate will almost always be lower than the rate you get when exchanging travelers checks or wiring money to Thailand (with exchange occurring at the Thai Bank and not at the sending bank).

If you are wiring money to your local Thailand bank, you would be using the Buy TT rate for your local bank. Ex: Today I got an automatic monthly transfer from te U.S. to Bangkok Bank...I got a Buy TT rate of 31.07 baht.