Baht's weakening in line with other regional currencies, BOT says
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The Bank of Thailand says the weakening of the baht is in line with the depreciations of other currencies in the region caused by market speculation that the US Federal Reserve will be able to increase its policy interest rate faster than expected.
The latest market consensus is that the United States will increase its policy rate in the third quarter of 2015.
The US announcement on Friday of a better-than-expected increase in the non-farm payroll in November has led to a strengthening of the dollar, BOT Assistant Governor Chantavarn Sucharitakul said. The payroll increased by 321,000 positions, against expectations of only 230,000.
Chantavarn said the baht was currently in the middle of the park when compared with other currencies in the region.
Asset outflows remain normal, with foreigners still net-sellers in the capital market. In the first 11 months of the year, they net-sold around US$1 billion. Currently foreigners hold 10 per cent of Thai government bonds, she said.
According to the Bloomberg website, the baht was at 33.074 per US dollar as of 5.45pm yesterday.
Supavud Saicheua, director of Phatra Capital, said the baht could reach 34 next year on the strengthening of the dollar.
