Bloomberg News

Baht Has Biggest Weekly Gain in Three Months on Stock Buying

October 28, 2011

Oct. 28 (Bloomberg) -- Thailand’s baht advanced the most in three months this week after international investors added to holdings of the nation’s assets.

Global funds bought $268 million more Thai equities than they sold in the last four days, exchange data show. Bonds rose this week after the Bank of Thailand cut the nation’s economic growth forecast for this year by about 1 percentage point to less than 3 percent following the worst floods in half a century. Stocks indexes rallied across Asia after Europe announced measures to contain the region’s debt crisis.

“People seem to be more focused on the relief of euro zone issues but are forgetting the particulars of the baht,” said Sacha Tihanyi, a Hong Kong-based currency strategist at Scotia Capital, the investment banking unit of Bank of Nova Scotia. The impact of the floods will show up in the long run and “we’re going to see growth-estimate reductions take place more and more.”

The baht advanced 1.5 percent this week to 30.54 per dollar as of 3:26 p.m. in Bangkok, according to data compiled by Bloomberg. That was the biggest gain since the five-day period ended July 8. The currency was little changed today.

The yield on the 5.25 percent notes due May 2014 dropped 14 basis points, or 0.14 percentage point, from a week ago to 3.17 percent, according to data compiled by Bloomberg. The rate was unchanged today.

--With assistance from Yumi Teso in Tokyo. Editors: Ven Ram, Sandy Hendry

To contact the reporter on this story: Andrea Wong in Taipei at awong268@bloomberg.net

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


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