Bloomberg News

Baht Halts Two-Day Gain as Inflation Accelerates on Costlier Oil

April 03, 2012

Thailand’s baht halted a two-day rally as data showed inflation accelerated last month for the first time since October.

Consumer prices climbed 3.45 percent from a year earlier on higher oil prices, the Ministry of Commerce said today. That compared with a 3.35 percent increase in February and a median estimate of 3.20 percent in a Bloomberg survey of economists. Inflation pressure is “still benign” compared with neighboring countries, Yanyong Phuangrach, the permanent secretary for commerce, said at a briefing in Bangkok today. Consumer-price gains will remain “well within our target of between 3.3 percent and 3.8 percent” this year, he said.

“The inflation data, although higher than expected, is within expectations given the flood-related stimulus,” said Leong Sook Mei, the Singapore-based regional head of global currency research at Bank of Tokyo-Mitsubishi UFJ. “It’s safer to say rates will remain unchanged given the uncertainties of oil prices and tail risks in Europe.”

The baht traded at 30.82 per dollar as of 3:49 p.m. in Bangkok, compared with 30.83 yesterday, according to data compiled by Bloomberg. The currency advanced as much as 0.2 percent to 30.77 earlier. One-month implied volatility, a measure of foreign-exchange swings used to price options, was steady at 4.52 percent. Local financial markets will be closed on April 6, April 9, April 13 and April 16 for public holidays.

Oil prices have climbed 5.7 percent this year to $104.47 a barrel in New York.

The yield on the 3.25 percent government bonds due June 2017 fell two basis points, or 0.02 percentage point, to 3.71 percent, according to data compiled by Bloomberg.

To contact the reporter on this story: Fion Li in Hong Kong at fli59@bloomberg.net

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


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