Thailand’s baht weakened beyond 31 per dollar for the first time since September as international investors cut holdings of the nation’s assets amid speculation the Federal Reserve will trim its monetary stimulus.
The MSCI Asia Pacific Index of shares fell 0.7 percent today and has lost 8.9 percent since May 22, when Fed Chairman Ben S. Bernanke said policy makers could reduce the $85 billion a month in bond purchases should there be a sustained improvement in the jobs market. Global funds sold $921 million more Thai stocks than they bought this month through yesterday and pulled a net $158 million from bonds, official data show.
“Funds are leaving Thailand and that is weighing on the baht,” said Kozo Hasegawa, a Bangkok-based foreign-exchange trader at Sumitomo Mitsui Banking Corp. “Fund movements by foreign investors are a major driver for the baht, while both importers and exporters have taken a wait-and-see attitude.”
The baht fell 0.3 percent to 31.08 per dollar as of 9:25 a.m. in Bangkok and touched 31.10 earlier, the weakest level since Sept. 11, according to data compiled by Bloomberg. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, climbed 22 basis points, or 0.22 percentage point, to 7.32 percent. The gauge last reached that level in December 2011.
The yield on the 3.625 percent government bonds due June 2023 rose one basis point to 3.99 percent, the highest level since September 2011, data compiled by Bloomberg show.
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