Baht stable despite recent weakening: BOT

Baht stable despite recent weakening: BOT

The recent weakening of the baht is in line with regional currencies because of the strengthening of the US dollar, the Bank of Thailand said yesterday.

It said it would reserve comment on the potential rise in the United States' benchmark interest rate until there is more clarity from the Federal Reserve's policy meeting on September 16 and 17.

Chirathep Senivongs Na Ayudhya, spokesman of the central bank, said the baht was now stable after bouncing up and down in the first seven months of the year from market speculation on key economic data of major economies.

However, the currency's volatility is still less than in 2012 and 2013, while its exchange rate is in the middle of the field of the region.

The baht's volatility in the year to Monday was 4.2 per cent compared with 5.8 per cent during the same period last year.

According to Bloomberg's website, the baht depreciated from 31.99 (S$1.25) per US dollar on Monday to 32.09 on Tuesday and continued falling to 32.147 as of 3pm yesterday.

Malaysia's ringgit slipped from 3.174 (S$1.25) on Monday to 3.20 per dollar at 3pm yesterday, while Indonesia's rupiah and the Philippines' peso retreated from 11,726 rupiah (S$1.28) to 11,788 rupiah and from 43.57 (S$1.25) pesos to 43.86 in the same period of time.

"The current strengthening of the US dollar is because the US economy improved from the first quarter to the second and its economic recovery is definitely better than those of the European Union and Japan.

"Germany's economy contracted by 0.2 per cent in the same period of time, which is more than what was expected at 0.1 per cent, and Japan's economy has also shrunk by 7 per cent because of the increase in its value-added tax," he said.

The US economy is definitely on the path to recovery, Chirathep believes.

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