Baht In The Doldrums At 41-41.5/dollar This Week

Baht in the doldrums at around 41-41.5/dollar this week

BANGKOK: -- Worries over an impending Bank of Thailand report that the country's gross domestic product (GDP) slipped during the second quarter this year to below 4 per cent will continue to depress the baht as the currency is expected to move between Bt 41-41.50/dollar this week, according to the Kasikorn Research Center.

A report issued by the Center said the baht softened to a low of Bt41.33 against the dollar last Wednesday (August 17)--its lowest level in almost two weeks--on investors' concerns over soaring global crude oil prices, which hit a record high at more than US$67 per barrel last Friday.

The sharp increase in crude oil prices on the world market had caused jitters among investors that economies in Asia -- including that of Thailand, which depends on oil imports -- would be affected, said the report.

Foreign investors became net sellers as they sold stocks listed on the Stock Exchange of Thailand while forecasts by the central bank saying that Thailand's GDP during the second quarter of this year might egrow less than 4 per cent compared to the same period of 2004 had further depressed the baht during the past week, the Center said.

This week, liquidity in the banking system and the short-tem interest rate are not anticipated to change much while the inter-bank rate is expected to move at the same level at around 2.68-2.75%, said the Center, adding that the baht would move between Bt41-41.5/dollar.

Factors that could influence the baht this week are the movements of the Thai bourse, global crude oil price, Japan's economic performance in July and US economic indicators, the report added.

--TNA 2005-08-