Bloomberg News

Thai Baht Declines to 15-Month Low as Overseas Funds Sell Stocks

November 24, 2011

Nov. 24 (Bloomberg) -- Thailand’s baht fell to a 15-month low after global investors sold the nation’s stocks on concern Europe’s debt crisis will worsen.

The currency declined for a sixth day as stock indexes slumped across Asia after Germany failed to receive sufficient bids at yesterday’s bond auction. Overseas funds cut holdings of Thai equities by $376 million this month, exchange data show. The drop in the baht was limited on speculation the central bank sold dollars in the currency market, according to Frances Cheung, a senior strategist at Credit Agricole CIB in Hong Kong.

“The disappointing result of the bund auction has damped risk appetite,” said Cheung. “There’re reasons to believe the Thai central bank has intervened in the currency market to stem losses in the baht. There’s also optimism that money will flow into the country when rebuilding starts after the flood water recedes.”

The baht declined to 31.35 per dollar as of 9:45 a.m. in Bangkok, from 31.34 yesterday, according to data compiled by Bloomberg. It touched 31.43 earlier, the weakest level since August, 2010.

Thai Prime Minister Yingluck Shinawatra said yesterday officials will have to let more water into Bangkok to appease residents from flooded districts who have held daily protests against measures to protect the inner city.

The yield on the 3.65 percent bonds due December 2021 was little changed at 3.41 percent, according to data compiled by Bloomberg. The one-year onshore interest-rate swap, the fixed cost needed to receive a floating payment, declined five basis points, or 0.05 percentage point, to 2.68 percent.

--Editors: Anil Varma, Andrew Janes

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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