Connect with us

Business

Thai baht may need another ‘haircut’ by the Bank of Thailand before the end of 2019

Thaiger

Published

 on 

image
image

Wednesday’s rate cut by the Bank of Thailand has not succeeded in reining in the surging baht, raising the prospect of another interest rate cut by 0.25 of a percentage point before the year-end.

While the central bank’s statement on the policy rate reduction didn’t mention the strength of the baht, economists suspect the baht’s strength and its impact on the Thai economy was a key reason for the Monetary Policy Committee’s decision. Yesterday they lowered the key interest rate by 0.25 percentage point – from 1.75% to 1.50%.

Yunyong Thaicharoen, first executive vice president and head of Siam Commercial Bank’s Economic Intelligence Centre says the Central Bank would have taken the sluggish economic growth into account.

“The baht has appreciated by 5.5% in 2019 when compared to neighbouring currencies, and the economic impact of the baht’s strength are starting to show in the country’s poor export performance”.

The Economic Intelligence Centre expects the BOT to reduce interest rate once more in 2019 by 0.25%, taking down the policy interest rate to 1.25% due to economic factors such as the impacts of the US-China trade war which has escalated to a currency war.

The baht was valued at 30.77 baht to the US dollar on August 7 after the interest rate cut, weakening by only 0.01 from 0.76 baht per US dollar on August 6.

The effectiveness of the central bank’s past measures to curb the strengthening baht has been unclear, said Tim Leelahaphan, an economist with Standard Chartered Bank.

On July 12, the BOT reduced the limits for outstanding balances of non-resident baht accounts and non-resident baht accounts for securities from 300 million to 200 million baht per non-resident.

Market analysts saw this announcement as the central bank’s attempt to reduce speculative capital inflows into Thailand’s economy.

Since then, the baht has appreciated slightly from 30.81 to 30.77 baht per US dollar.

Economists suggest that the key reason for the baht’s strength is largely unaffected by the BOT’s measures, as Thailand’s current account surplus, valued at 6% of GDP, leads to a perception among foreign investors of the country being a “safe haven” as an investment destination.

SOURCE: The Nation

 

Get more from The Thaiger

📱 Download our app on Android or iOS
👋 Have your say on our Thailand forum
🔔 Subscribe to our daily newsletter
📺 Subscribe / Join for daily shows
👍 Like/Follow us on Facebook
🐦 FOLLOW us on Twitter
📷 FOLLOW us on Instagram

image

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Thailand's largest online portal for news and information.

Follow Thaiger by email:

Media16 hours ago

No sex please, we’re Thai

Events17 hours ago

An aquatic meal with Olga Belka – taking art to new depths

Transport20 hours ago

Hua Lamphong (Bangkok Train Station) – History and future | VIDEO

Sponsored3 days ago

CBRE recommends top 5 luxury condominiums in Phuket with fantastic locations

imageimage
Thailand21 hours ago

Bug-eating challenge with Natty, feat. Mark Abbott | VIDEO

Coronavirus (Covid-19)22 hours ago

UPDATE: Israel bans ALL foreign entry over Omicron

Thailand1 day ago

New variant could dampen Thailand’s reopening enthusiasm

image
Join the conversation on the Thaiger Talk forums today!
Coronavirus (Covid-19)1 day ago

UPDATE: Latest news on Omicron – what we know

Tourism2 days ago

Songkhla prepares for tourism across the Southern land border

Thailand2 days ago

French expat being denied re-entry to Thailand over repeated criticism of the Thai monarchy

Coronavirus (Covid-19)2 days ago

COVID-19 SATURDAY: 6,073 infections, 32 deaths, provincial data

Coronavirus (Covid-19)2 days ago

Omicron causing concern, Thai authorities ban travellers from 8 countries

Coronavirus (Covid-19)2 days ago

Thailand’s nightlife venues and bars told to keep closed until January 16

Protests2 days ago

Amnesty International under investigation for defending activists

Coronavirus (Covid-19)2 days ago

New Covid-19 strain named “Omicron” and a variant of concern

Thailand2 days ago

Entertainment venues will not open before January 16

Thailand3 months ago

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

Thailand9 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism9 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket9 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism9 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand9 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism9 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand10 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand10 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand10 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand11 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand11 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand11 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand11 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand11 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Trending