Baht too strong: Tarisa
The Bank of Thailand yesterday warned the baht was "too strong" after the currency appreciated to 37.08 to the US dollar - its highest level six years and 10 months - due mainly to capital inflows.
Dealers predict the baht will even grow stronger by year's end, to 36.50 to the dollar. The baht opened yesterday at 37.16/37.18 against the dollar before shooting up to 37.08 during the day's trading. It closed at 37.11/37.14.BOT Governor Tarisa Watanagase said the baht had strengthened too much against the dollar, due to strong foreign inflows. But she declined to comment on whether the central bank would intervene to curb the rise. Songpol Chevapanyaroj, head of Kasikornbank's capital-market operations, said yesterday that the baht appreciation was due mainly to capital inflows into Asia, including Thailand. He said investors shifted away from the dollar, which is weakening due to fears that the US central bank will keep its signal rate unchanged at its next meeting. He predicted the baht would hover between 37 and 37.30 to the dollar over the next two weeks. Phatra Securities managing director Supavud Saicheua also sees the possibility that the baht will further strengthen to 37 to the dollar, on the back of continued capital inflows to the region. "At that level, it's not too strong compared with the strength of regional currencies," he noted. However, he expressed concern that a strong baht could encourage local manufacturers to import raw materials, which could widen trade deficits and eventually weaken the exchange rate. - Somruedi Banchongduang, The Nation.
|
