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Thai baht hits new record high in two years

The Thai baht is one of the best-performing currencies in the region this year, rising about 5% against the dollar.

Olivier Languepin

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The Thai baht rose to 33.94 baht per USD, a record high in the past two years after the Bank of Thailand (BOT) decided not to take measures to stop the rise of the domestic currency.

Previously, in April, BOT imposed measures to scale back short-dated bond sales in an effort to lower short-term fund inflows, which strengthen the baht. The measures are still in place.

The Bank of Thailand remains worried about a strong baht and short-term capital inflows, the governor said to the Bangkok Post, as the currency traded near its highest against the dollar in more than 22 months.

On Monday, the central bank relaxed foreign exchange rules, letting more Thais buy securities overseas and commercial banks lend baht to non-residents for investment in Thailand and the Greater Mekong sub-region.

But the move failed to prevent the bath to continue on its rising trend. The baht edged up to 33.94 to the dollar Tuesday, marking its highest point in nearly two years. The local currency is one of the best-performing currencies in the region this year, rising about 5% against the dollar.

The Thai baht is one of the best-performing currencies in Asia, ranking fifth since 2016, following the won of the Republic of Korea (up 7.9 percent), Taiwan dollar (7.2 percent), Indian rupee (5.9 percent) and Malaysian ringgit (5.5 percent).

Past moves to try to weaken the baht have failed. Some business analysts believe Thais just prefer to keep their money at home and don’t like to invest in foreign assets.

On Wednesday the 7th of June The central bank has left interest rates unchanged despite a bout of deflation. A lack of inflationary pressures signals the benchmark will stay at 1.5 percent through the third quarter of next year, according to a Bloomberg survey.

In related news, the Bank of Ayudhya, one of the local leading banks, raised its baht forecast average by 34.50 baht per USD at the end of the year from 35.50 previously because of greater uncertainties, particularly the US monetary and trade policy.

According to Kasikornbank in Bangkok, Thailand had the world’s third largest surplus in 2016 – 11.3% of gross domestic product, trailing only Singapore and Taiwan.

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Banking

Corporate debt market in Thailand well positioned for further growth

Brazil, China, South Africa and Thailand are best-placed for corporate debt market growth says Moody’s Investors Service in a report that analyzed trends in 35 emerging markets.

Olivier Languepin

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Corporate debt markets in Brazil (Ba2 stable), China (A1 stable), South Africa (Baa3 negative) and Thailand (Baa1 positive) are best-placed to achieve further growth in the coming years, Moody’s Investors Service said today in a report that analyzed trends in 35 emerging markets.

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Banking

BOT relaxes rules to Curb Strong Baht

the Bank of Thailand (BOT) decided to relax regulations to facilitate capital outflows to help promote capital flow balance and lessen pressure on the baht.

Boris Sullivan

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The Thai baht has been under pressure due to imbalanced capital flows in the current environment of highly uncertain and volatile external conditions, the Ministry of Finance (MOF) and the Bank of Thailand (BOT) decided to relax regulations to facilitate capital outflows to help promote capital flow balance and lessen pressure on the baht.

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Banking

Bank of Thailand cuts rate by 0.25% to 1.25 per cent

The latest cut brings the Bot’s policy rate to an historical low, which the bank maintained from April 2009 to July 2010 during the subprime global financial crisis.

Bahar Karaman

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​On 6 November 2019, the MPC voted 5 to 2 to reduce the policy rate by 0.25 percentage point from 1.50 to 1.25 percent, effective immediately. Two members voted to maintain the policy rate at 1.50 percent.

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