Bloomberg News

Baht Advances After Global Funds Bet on Thai Economic Recovery

March 12, 2012

Thailand’s baht snapped a two-day drop after international investors added to holdings of the nation’s assets on optimism growth in Southeast Asia’s second- biggest economy is improving.

Global funds bought $305 million more Thai stocks than they sold this month through yesterday and purchased a net $1.7 billion of government debt, according to data from the stock exchange and the Thai Bond Market Association (TBTVFCNV). Gross domestic product will rise between 5.5 percent and 6.5 percent this year after increasing 0.1 percent in 2011, Prime Minister Yingluck Shinawatra said on March 7.

“Asia’s economic growth is faster than developed nations and there’s optimism growth will expand further,” said Yuji Kameoka, chief currency strategist at Daiwa Securities Co. in Tokyo. “Fund inflows into the region are likely to continue and Asian currencies may see some appreciation pressure.”

The baht advanced 0.1 percent to 30.62 per dollar as of 8:20 a.m. in Bangkok, according to data compiled by Bloomberg. The currency has strengthened 0.7 percent in the past month, the best performance among Asia’s 11 most-traded currencies.

One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 6.5250 percent.

The yield on the government’s 3.25 percent bonds due June 2017 declined one basis point, or 0.01 percentage point, to 3.43 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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