Global volatility leads to volatile baht
The Bank of Thailand attributed the current volatility of the Thai baht to sharp fluctuations of the euro against dollar.
The baht's daily volatility is currently about over 6 per cent, said Singhachai Boonyayotin, senior director for Financial Markets Department. Some regional currencies have shown over 10 per cent in daily volatility, he noted.
According to the central bank, the baht at 30.95 per US dollar today weakened 0.16 per cent from yesterday. It however appreciated 1.94 per cent from Dec 30 level of 31.55.
Thai exporters have adjusted themselves well with better risk management for the currency volatility, Singchai said.
"This year, we see both appreciation and depreciation in the US dollar against other currencies, allowing regional currencies to move in two ways," Singhachai said. Previously, the US dollar moved in only one way, up or down, influencing regional currencies to move only in the opposite way.
The Thai baht has recently strengthened thanks to inflows to the stock and bond markets, but more Thai investment would also go overseas which would help weaken the baht.
"Now, the market mechanism is better and that allows two-way flow (of capital)," he said.
