Bloomberg News

Thai Baht Declines for Second Day as Central Bank May Intervene

February 27, 2012

Thailand’s baht dropped by the most in three weeks on speculation the central bank will limit gains to support exporters recovering from last year’s floods.

The Bank of Thailand intervened in the market this year, Deputy Governor Suchada Kirakul said on Feb. 24 when the currency reached a five-month high of 30.22 per dollar. The baht has advanced 1.5 percent this month, the best performance among Asia’s most-actively traded currencies, as overseas investors purchased $1.4 billion more Thai equities than they sold, exchange data show.

“The central bank knows exporters in Thailand are trying to recover from last year’s floods and the sharp appreciation of the baht is definitely not welcome,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo. “Funds are flowing into Asia and that may continue to support the regional currencies.”

The baht dropped 0.3 percent to 30.48 per dollar as of 3:46 p.m. in Bangkok, according to data compiled by Bloomberg. That was the biggest decline since Feb. 6.

Thailand’s industrial output fell the least in four months in January as companies resumed operations and supply-chain disruptions eased after the floods. The industrial production index dropped for a fifth month, slipping 15 percent from a year earlier, after a revised 25 percent contraction in December, the Office of Industrial Economics said today.

Government trade data due this week may show exports were unchanged from a year earlier in January after decreasing in the previous two months, according to the median forecast of economists in a Bloomberg survey. Thailand’s target for export growth of 15 percent this year is “achievable” as companies start to run plants at full capacity again, Commerce Minister Boonsong Teriyapirom said on Feb. 23.

The yield on the 3.25 percent notes due June 2017 was little changed at 3.27 percent, according to data compiled by Bloomberg.

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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