Tourists in Bangkok, Thailand. (Photo: AFP/VNA) Hanoi (VNA) – Thailand’s domestic currency (baht) is experiencing its worst January since 2020with a loss of nearly 4% versus the US dollar, and heavy outflows signal more downfallfor the currency.
The baht has becomethe biggest loser this year as global funds shun Thai assets amid a debatebetween with the nation’s government and central bank on how to stimulate theflagging economy, according to Bloomberg.
Thai DeputyFinance Minister Julapun Amornvivat said that the government last week wasconcerned that borrowing costs hovering at a 10-year high are holding backrecovery. That’s after the central bank pushed back against rate cut calls,saying lowering borrowing costs can’t fix structural problems in the economy.
Alvin Tan, headof Asia FX strategy at RBC Capital Markets in Singapore, said that the baht willcontinue to feel the drag from the growing political backlash against itscurrent level of policy rates.
He said he’slooking for dollar-baht to trade in a range of 36.0-36.50 in the coming weeks.Thai baht (THB) closed at 35.63 last week.
Foreigninvestors’ net equity outflows have reached 808 million USD this year totally whileThailand’s benchmark stock index fell to a three-year low last week amid growthconcern. The country’s debt isn’t proving attractive either as the market sawoutflows after recent bond defaults and a major accounting scandal shookinvestors.
Nicholas Chia, amacro strategist at Standard Chartered Bank SG Ltd, said that the ongoingrecovery in Thailand’s tourism is baht-positive. However, per capita touristspending and Chinese arrivals in 2023 lagged pre-pandemic levels./.
