Reserves hit high; BOT happy with stable baht
Thailand's foreign reserves as of March 30 reached a record high of US$70.9 billion (Bt2.4 trillion), and the central bank is satisfied with the stabilisation of the baht along with foreign capital flowing into the stock market over the past week.
The Bank of Thailand yesterday announced its international reserves at a historic high, rising from $69.6 billion a week earlier. The BOT said in a statement that its net forward position in the foreign-exchange markets was $8.5 billion, compared with $9.4 billion on March 23. The central bank does not provide an explanation for changes in its weekly data. But, in practical terms, when it intervenes in the forex market to stabilise the Thai currency, it buys dollars against the baht in order to prevent the unit's rapid appreciation. This has boosted the dollars in its foreign reserves. BOT senior director Pongpen Ruengvirayudh said yesterday that the baht had remained strong as foreign capital has flowed into the stock market over the past week. Yesterday, the baht opened at 34.96-34.98 per dollar and peaked at 34.91, before closing at 34.90-34.93. Pongpen said the central bank had been satisfied with the baht's stability, hovering in a range of only Bt0.03-Bt0.04 to the greenback each day as demand and supply for the local unit has become more balanced. She added that exporters who had earlier been panic-selling dollars for baht since they were concerned that the Thai currency would appreciate much further, now understood the situation and have more confidence. They have slowed down their panic sales of the dollar, which had earlier built up pressure and boosted the baht's value. In addition, some commercial banks which have been speculating on the baht over the past weeks have also stopped their speculative activities. The BOT last week demanded that these banks cease such speculation, which has also added more pressure on the strengthening baht. Foreign investors have bought into Thai stocks since Monday with a net purchase position of about Bt1 billion per day, and as high as Bt3.23 billion on Wednesday. However, dealers said the rally would be temporary as it was caused by optimism over a policy-rate cut expected next week, as well as the launching of an economic stimulus policy by the government. They believe the stock market will correct itself, before rallying again after the Songkran holiday. Yesterday, the main stock index closed at 692.47, a slight decline of 0.15 per cent on turnover of Bt10.17 billion. Net buying by foreign investors was accounted at Bt1.17 billion. "The index dropped slightly on profit-taking ahead of the long holiday weekend. There was selective buying and selling of big-cap stocks in energy, banking and telecom stocks," said Adisak Kammool, a senior stock analyst at KGI Securities. Anoma Srisukkasem The Nation
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