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Volatility to extend to January

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The dollar/baht exchange rate would remain volatile in January as political instability could delay new capital inflows, said a Bank of Thailand official.

The Thai baht today opened at 32.72 per dollar.

Deputy Governor Pongpen Ruengvirayudh added that much depends on the elections. Amid calls for reforms before elections, it remains to be seen whether the elections would be postponed from February 2.

She noted that if the elections are postponed because all parties reach a compromise, this should be welcomed by foreign investors. However, if the elections are postponed without any compromise, this could lead to a negative consequence.

"Externally, the tapering on the quantitative easing is a factor to watch. Domestically, there are political uncertainties, which must be monitored, as this would largely influence the movement in January," she said.

She added that capital outflows are slowing down, compared to the past few weeks. Throughout this year, foreign investors have sold Thai shares for US$6 billion net.


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