Bloomberg News

Baht Has Biggest Weekly Loss in 2012 on Outflows From Stocks

May 25, 2012

Thailand’s baht had its biggest weekly drop in 2012 after foreign funds cut holdings of the nation’s equities amid concern Europe’s debt crisis will slow global economic growth.

The currency fell for a fourth week as global investors sold $187 million more local stocks than they bought in the first four days of the week, exchange data show. The SET (SET) Index of shares has fallen 2.1 percent so far this week and is poised for a third weekly decline.

“Investors are risk-averse and stock markets and Asian currencies can still test the weaker side,” said Nalin Chutchotitham, a Bangkok-based analyst at Kasikornbank Pcl. (KBANK) “Importers may be buying the dollar as well because month-end demand is usually high and also because they are worried that the dollar may rise further.”

The baht declined 1.1 percent this week, the most since the five-day period ended Dec. 16, to 31.69 per dollar as of 3:10 p.m. in Bangkok, according to data compiled by Bloomberg. The currency dropped 0.3 percent today and reached 31.73 earlier, the weakest level since Jan. 19.

One-month implied volatility, a measure of exchange-rate swings used to price options, was little changed at 4.52 percent today and unchanged from a week ago.

Exports unexpectedly fell in April, the fifth decline in six months. Overseas shipments dropped 3.67 percent from a year earlier, the Ministry of Commerce said today. The median of 13 estimates in a Bloomberg News survey was for a 6.4 percent rise.

The yield on the 3.25 percent bond due June 2017 rose five basis points, or 0.05 percentage point, to 3.56 percent this week, according to data compiled by Bloomberg. The rate declined two basis points today.

To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net

To contact the editor responsible for this story: Ven Ram at vram1@bloomberg.net


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