Thailand’s baht gained, halting a three-day loss, on speculation exporters increased demand for the currency as the month-end approaches. Government bonds rose as Europe’s debt crisis boosted appetite for safer assets.
The Bank of Thailand held its benchmark interest rate at 3 percent today, as forecast by all 14 economists in a Bloomberg News survey. The central bank also lowered its 2012 economic growth prediction to 5.7 percent from 6 percent. The MSCI Asia- Pacific Index of regional shares dropped as a German report showed business confidence fell in July to the lowest level in more than two years.
“It’s close to the end of the month and the current level is quite good, so we can expect to see some exporter demand for the baht,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo. “Concern about Europe’s situation discourages investors to take risks, dragging stocks and Asian currencies down.”
The baht rose 0.2 percent to 31.72 per dollar as of 3:27 p.m. in Bangkok, according to data compiled by Bloomberg. Its one-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 5.02 percent.
Foreign funds sold $75 million more Thai equities than they bought in the first two days of this week, exchange data show.
Exports unexpectedly dropped in June, falling 4.2 percent from a year earlier after an increase of 7.7 percent the previous month, a government report showed today. The median forecast in a Bloomberg survey was for a gain of 4.5 percent.
The yield on the 3.25 percent government bonds due June 2017 fell one basis point, or 0.01 percentage point, to 3.14 percent, according to data compiled by Bloomberg.
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