Oct. 11 (Bloomberg) -- Thailand’s baht fell, reversing earlier gains, on concern the nation’s worst floods in more than half a century will erode economic growth. Government bonds rose.
Thailand’s exports may expand at a slower pace in the fourth quarter partly as floods disrupt manufacturing and transportation, the University of the Thai Chamber of Commerce said. The finance ministry slashed its growth forecast for the economy yesterday after flooding forced companies including Honda Motor Co., Japan’s third-largest automaker, and the world’s two biggest makers of high-end cameras, Canon Inc. and Nikon Corp., to suspend production.
“With the closure of factories and halting of production, there’s concern floods will not only hurt the export outlook but also the employment situation,” said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo. “You don’t want to buy the baht now.”
The baht dropped 0.3 percent to 30.96 per dollar as of 3:46 p.m. in Bangkok, according to data compiled by Bloomberg. The currency earlier touched 30.82, the strongest level since Sept. 23, after data from the Thai Bond Market Association showed global funds bought $157 million more Thai government notes than they sold in the last two days.
Thailand’s economy will expand 3.7 percent this year, the finance ministry said yesterday. That compares with a range of 3.8 percent to 4.3 percent forecast last month.
The yield on the government’s 5.25 percent bonds due May 2014 dropped eight basis points, or 0.08 percentage point, to 3.41 percent, according to data compiled by Bloomberg. The price rose to 104.482 from 104.281 yesterday.
--With assistance from Suttinee Yuvejwattana in Bangkok. Editor: Tony Jordan
To contact the reporter on this story: Yumi Teso in Bangkok at email@example.com
To contact the editor responsible for this story: Sandy Hendry at firstname.lastname@example.org