Thai baht tumbles to six-year low versus US dollar

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baht-ThaiGood news for Thai exporters and for those who want to buy property in Thailand, but bad news for the Thai economy as such: The Thai baht depreciated to a six-year low on July 24, ending the day at a rate of 34.92 to one US dollar. This is the lowest since May 2009.

Chantavarn Sucharitakul, the Bank of Thailand’s assistant governor for Financial Markets Operations Group, admitted that the baht is dropping “quite fast”, having lost about 2 per cent against the US dollar last week. This is faster than the depreciation of other currencies in the region, which depreciated 0.3-1.5 per cent in the period.

“The external factor is driven by market speculation that the US Federal Reserve will hike its policy interest rate within this year based on the Fed’s comments and recent positive US economic data while the price of gold has dropped below $1,100 per ounce, which has led to increased demand for the precious metal and demand for the US dollar as well,” she explained.

In addition, there are concerns that Thailand’s economic performance could be hit by the ongoing drought and the delay in the government’s investment projects.

Such an outlook has prompted analysts to lower the country’s gross domestic product forecast for this year, with second-half growth to be less than the first half.

Chantavarn said the Bank of Thailand has not seen any irregularity in the forex markets with relation to the baht.

“The weakening of the baht is needed to support the economic recovery but too rapid a deprecation would make it difficult for the private sector to adapt so the BOT is keeping a close watch,” she said.

According to Kasikornbank, the baht is projected to drop below 35 to the US dollar in the fourth quarter of this year, trading within the target of t35.25 baht.

Commerce Minister Chatchai Sarikulya said the baht’s weakness should boost export growth in the second half of the year after facing a contraction in the first six months with June shipments estimated to be down 6-7 per cent year on year. Exports in the first half of the year dropped about 5 per cent compared to the same period last year.

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Reading Time: 2 minutes

Good news for Thai exporters and for those who want to buy property in Thailand, but bad news for the Thai economy as such: The Thai baht depreciated to a six-year low on July 24, ending the day at a rate of 34.92 to one US dollar. This is the lowest since May 2009.

Reading Time: 2 minutes

baht-ThaiGood news for Thai exporters and for those who want to buy property in Thailand, but bad news for the Thai economy as such: The Thai baht depreciated to a six-year low on July 24, ending the day at a rate of 34.92 to one US dollar. This is the lowest since May 2009.

Chantavarn Sucharitakul, the Bank of Thailand’s assistant governor for Financial Markets Operations Group, admitted that the baht is dropping “quite fast”, having lost about 2 per cent against the US dollar last week. This is faster than the depreciation of other currencies in the region, which depreciated 0.3-1.5 per cent in the period.

“The external factor is driven by market speculation that the US Federal Reserve will hike its policy interest rate within this year based on the Fed’s comments and recent positive US economic data while the price of gold has dropped below $1,100 per ounce, which has led to increased demand for the precious metal and demand for the US dollar as well,” she explained.

In addition, there are concerns that Thailand’s economic performance could be hit by the ongoing drought and the delay in the government’s investment projects.

Such an outlook has prompted analysts to lower the country’s gross domestic product forecast for this year, with second-half growth to be less than the first half.

Chantavarn said the Bank of Thailand has not seen any irregularity in the forex markets with relation to the baht.

“The weakening of the baht is needed to support the economic recovery but too rapid a deprecation would make it difficult for the private sector to adapt so the BOT is keeping a close watch,” she said.

According to Kasikornbank, the baht is projected to drop below 35 to the US dollar in the fourth quarter of this year, trading within the target of t35.25 baht.

Commerce Minister Chatchai Sarikulya said the baht’s weakness should boost export growth in the second half of the year after facing a contraction in the first six months with June shipments estimated to be down 6-7 per cent year on year. Exports in the first half of the year dropped about 5 per cent compared to the same period last year.

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