Bloomberg News

Thai Baht Drops as Data Show Export Slump Deepened; Bonds Rise

August 29, 2012

Thailand’s baht weakened for a fourth day, the longest losing stretch in two months, as a government report showed exports fell faster than economists estimated on cooling global demand. Government bonds rose.

Shipments, which account for about two-thirds of Thai economy, dropped 4.5 percent in July from a year earlier, more than the median forecast in a Bloomberg survey for a 3.8 percent decline, official figures showed today. Overseas sales shrank 2.3 percent in June. Federal Reserve Chairman Ben S. Bernanke will speak Aug. 31 at Jackson Hole, Wyoming, where he may clarify views on further monetary easing to spur growth in the U.S. economy, Thailand’s third-biggest export market.

“With weak external conditions hurting exports in general, we are not in a situation where we expect aggressive fund inflows into Asia,” said Kozo Hasegawa, a Bangkok-based currency trader at Sumitomo Mitsui Banking Corp. “The baht may not see a big move before Bernanke’s speech.”

The baht declined 0.1 percent to 31.34 per dollar as of 3:22 p.m. in Bangkok, according to data compiled by Bloomberg. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 4.51 percent.

Government bonds rose for the first time this week after global funds raised holdings of the nation’s debt for a fourth straight day. The yield on the 3.625 percent bonds due May 2015 fell one basis point, or 0.01 percentage point, to 3.11 percent, according to data compiled by Bloomberg.

International investors purchased $846 million more of government debt than they sold in the last four days through yesterday, according to data from the Thai Bond Market Association.

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

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.


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