THAILAND - Falling to a one-year low yesterday at 31.82, the baht has suffered from depreciation against the US dollar along with most emerging-market currencies.
Compared with this year's peak of 28.62, registered on April 19, the baht has fallen by 11.18 per cent. It has weakened by 4 per cent from 30.60 at end-2012.
Foreign investors are pulling money out of developing economies amid speculation that the US Federal Reserve will pare stimulus that has fuelled demand for emerging-market assets.
Investors pulled US$8.4 billion (S$10.6 billion) from developing-nation exchange-traded funds this year as economies from Indonesia to India weakened while the Fed is pulling out of its quantitative-easing programme. At press time, the Federal Open Market Committee's minutes of its July meeting had not yet been published.
A Bloomberg survey of economists found that 65 per cent of respondents predicted the Fed would taper bond purchases next month.
Data showed that net-sells of Thai bonds this month have reached $530 million or nearly Bt16.9 billion (S$673 million) . Meanwhile, after the single-day net-sell of Bt11.4 billion in Thai stocks on Tuesday and then Bt5.7 billion yesterday, year to date, foreign net-sells of Thai shares reached Bt106.7 billion.
"Basically, sentiment for emerging-market assets is weak due to speculation about the Fed's tapering," Tsutomu Soma, a manager of the fixed-income business unit at Rakuten Securities Inc in Tokyo, told Bloomberg. "Funds are flowing out from emerging markets. On top of that, Thailand's growth concerns are adding downward pressure."
A day after the National Economic and Social Development Board announced the second-quarter economic data on Monday, the baht fell from 31.20 to 31.53. The currency yesterday dropped 0.5 per cent to 31.82 per dollar as of 3.41pm in Bangkok after touching 31.83 earlier, the weakest level since July 2012, according to data compiled by Bloomberg.
Thailand, RP in better shape