Baht at fresh new 16-year high
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Thai baht keeps appreciating on Monday, trading at 28.56 per US dollar at 8.25am - or a fresh new 16-year high, according to Bank of Thailand's data.
Compared to Friday's closing, the baht went up by 0.18 per cent. Month to date, the currency has strengthened by 2.56 per cent. The year-to-date appreciation is 6 per cent.
On continued capital inflows, the baht also strengthened against the euro and Japanese yen today. Month to date, it has appreciated 8.82 per cent against yen, to 28.61 per 100 yen. In the same period, it rose 0.56 per cent against euro, to 37.33.
Exporters have been crying foul over the sharp appreciation. The frozen food association estimated that every Bt1 appreciation will shave off export revenue by Bt20 billion. The association is now fretting that it woudl fail to achieve the revenue target of Bt1 trillion this year.
Monetary easing in the US, Europe and Japan has pumped excess liquidity and encouraged global funds to seek higher returns elsewhere.
The Thai baht has strengthened sharply this month following the monetary easing in Japan.
At the meeting on early April, the Bank of Japan left the policy rate unchanged at 0-0.1 per cent as expected, but implemented a substantial monetary easing at newly sworn-in Governor Haruhiko Kuroda’s first monetary policy meeting. The BoJ will target a 2 per cent inflation rate within two years and expand its asset purchase programme with a twist towards buying longer-dated bonds. Moreover, the BoJ will now target the monetary base, rather than the policy rate, with aim of doubling the monetary base within two years. This is a substantial loosening in Japan's monetary stance.
