Exporters coping with volatile baht, BOT exec says
Thai exporters have started to adjust to currency volatility, as the baht has moved on worries over slowing US growth, an expected recession in Europe and signs of a less robust Chinese economy, an executive at the Bank of Thailand said.
“When the baht depreciated by 30 satang, they could handle the situation well,” said Singhachai Boonyayotin, the central bank’s senior director for the Financial Markets Department.
Thai exporters continue to manage their foreign-exchange risks through forward contracts. Importers followed with their necessary orders.
Currently, the baht is relatively volatile, Singhachai said, moving in a range of about 5 per cent since the beginning of this year.
Currency volatility may be a feature of 2012, according to Standard Chartered Bank’s “Global Focus 2012 – The Year Ahead”.
The baht closed yesterday at 31.35 per US dollar.
Reinsurance claims from the floods have helped keep the baht from weakening too much, Singhachai said.
Europe’s debt crisis remains a risk to growth and to financial markets across the world, including Thailand.
Thailand’s swap market remains stable, with the swap rate in the range of 2.7-2.8 per cent. “We have not seen any irregularity in the market,” Singhachai said.
Late last month, the US Federal Reserve, along with five other central banks, acted to make it cheaper for banks around the world to borrow US dollars – a staple of global financial transactions. The Fed’s swap lines can work as a backstop against market-liquidity problems.
Many countries have been monitoring US liquidity closely, Singhachai said.
In the long term, the dollar is likely to weaken against other currencies as investors may shift their money into safer Treasuries, he said.
The Standard Chartered report said: “On a multi-year basis, we expect the US dollar to weaken, reflecting the significant debt overhang for the US economy and continued gradual diversification away from the US dollar in global portfolios.”
