BANGKOK, 15 September 2019(NNT) – The Thai economy is experiencing a slowdown mostly due to several external factors, particularly the volatile global economy and the ongoing trade war between China and the United States.
The baht has strengthened to a six-year high and it is likely to further appreciate. This is an opportunity for investors to invest in the low-risk Thailand Futures Exchange (TFEX) market.
TFEX has organized a seminar on investment opportunities amid the strengthening baht and fluctuating gold prices. The TFEX Managing Director, Dr. Rinjai Chakornpipat, said this weekend that TFEX has been growing continually since the beginning of the year.
Many investors have expressed their interest in this market, as there are some 400,000 contracts being recorded each day.
Negative factors, such as the trade war and the appreciating Thai currency, have encouraged investors to invest in other markets, including TFEX. In addition, gold prices are likely to increase further and this is considered a low-risk investment.
The Chair Executive Officer (CEO) of YLG Bullion and Futures Company Limited, Tipa Nawawattanasub, said today that gold prices in the world market are projected to increase until the end of this year because of the global economic situation.
The interest rate set by the United States Federal Reserve (Fed) will cause the domestic gold price to stay in the range of 21,300 to 22,300 baht per baht-weight. The baht should stay between 29.50 baht and 31.50 baht per US dollar. However, the Fed is expected to slash its interest annual rate by 0.25 to 0.50%.
Strong baht sends jitters through Thai export sector
Thailand’s private sector has expressed serious concern over the strengthening baht, which has rallied to its highest level against the US dollar for six years and may badly affect the country’s export
Relentless rise of Thai baht causes exporting concerns
Commerce Ministry officials fear that continued currency strength could hinder Thai exports.
A challenging Baht for the Thai economy in 2019 ?
Exporters are increasingly worried as the Thai baht continues to perform against the US dollar
Thanks to Thailand’s walloping US$207 billion of foreign reserves, Thai baht’s climb of about 5% against the dollar in the past six months is the strongest in the world, according to data compiled by Bloomberg.
This may be good news if you plan to travel abroad, but not so good if your business is exporting Thai products.
According to KBank forecast, the baht’s value could appreciate to 31.50 against the US dollar this quarter because prevailing global financial volatility is poised to compel investors to seek refuge in new safe-haven destinations.
“It will be tough this year,” said Duangrat Prajaksilpthai to the Bangkok Post, an economist at TMB Bank.
“Exports were already expected to slow down because of the impact of the trade war. Baht strength on top of that will curb export revenue when converted to local currency.”
Duangrat Prajaksilpthai, economist at TMB Bank.
The Bank of Thailand raised its benchmark interest-rate in December for the first time since 2011, by a quarter point to 1.75% , but the baht’s climb could complicate the central bank efforts to normalize policy by weighing on already below-target inflation.
Thailand’s current account balance accounted for 10.8% of GDP in 2017, thanks to increasing tourism revenues, is also the eighth highest in the world, based on data compiled by the International Monetary Fund.
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