Bloomberg News

Baht Drops to Weakest Level in a Year After Current-Account Data

October 03, 2011

Oct. 3 (Bloomberg) -- Thailand’s baht fell to its weakest level in more than a year after export growth moderated and the nation’s current account swung to a deficit in August.

Overseas shipments, which account for about two-thirds of Southeast Asia’s second-biggest economy, rose 28 percent from a year earlier after having increased 36 percent in July, the central bank said on Sept. 30. The current account, a broad measure of trade, showed a shortfall of $697 million from a surplus of $3.4 billion in July. The MSCI Asia-Pacific Index of regional shares slid for a second day before European officials meet today to discuss the threat of a Greek default.

“Sluggish economic conditions in developed nations are hurting sentiment for Thailand that heavily depends on exports,” said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo. “Investors have become risk averse because there hasn’t been any fundamental solution to Europe’s problems yet.”

The baht slumped 0.5 percent to 31.25 per dollar as of 3:19 p.m. in Bangkok, according to data compiled by Bloomberg. It touched 31.36 earlier, the weakest level since Aug. 27, 2010. The currency lost 3.7 percent in September, the biggest monthly decline since March 2001.

Global funds sold $542 million more Thai equities and $48 million more local government debt than they bought last month, according to data from the stock exchange and the Thai Bond Market Association.

A government report today showed consumer prices gained 4.03 percent in September from a year earlier, compared with a 4.29 percent pace the previous month.

Government bonds fell. The yield on the 5.25 percent notes due May 2014 added three basis points, or 0.03 percentage point, to 3.57 percent, according to data compiled by Bloomberg.

--Editors: Ven Ram, James Regan

To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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