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BOT may reduce forex reserves to delay weakening of the baht

BOT may reduce forex reserves to delay weakening of the baht

FRIDAY, March 26, 2021
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The baht opened at 31.16 to the US dollar on Friday, weakening from its close of 31.10 on Thursday.

The Thai currency is likely to move between 31.05 and 31.20 during the day, Krungthai Bank market strategist Poon Panichpibool said.

As on previous days, Poon said the baht would continue to fluctuate in line with the dollar, while the Thai currency would likely weaken.

He suggested that investors monitor foreign funds flows in the stock market, as the Thai market has risen compared to other stock markets at the end of this quarter.

The market strategist predicted that some institutions would adjust their investment portfolio by decreasing the proportion of stocks and increasing the share of bonds.

Poon said that investors would sell more and more stocks in the Thai market.

He believed the Bank of Thailand would sell dollars to reduce its foreign exchange reserves and in turn delay the weakening of the baht.

“Thailand would probably decide to reduce its reserves in order to delay the baht weakening, and at the same time avoid being accused of being a currency manipulator by the US,” he added.