Thai Baht Weakens as Oil Price Rises on Middle East Turmoil
Thailand’s baht weakened for the first time in three days as political turmoil in the Middle East pushed up oil prices, raising concern global economic growth will slow.
Crude for April delivery rallied past $100 a barrel and U.S. Federal Reserve Chairman Ben S. Bernanke said yesterday a sustained jump in the price of oil threatened to cause slower growth and higher inflation. Rising commodity costs resulted in Thailand’s current-account surplus shrinking to $1.09 billion in January from $1.75 billion in December, the central bank said last month. The country has raised borrowing costs four times since June.
“Thailand relies on imported oil, so higher crude prices will be negative for the current account,” said Vishnu Varathan, an economist in Singapore at Capital Economics Asia) Pte. “Inflation is becoming a big concern. We believe the Bank of Thailand will continue to tighten.”
The baht fell 0.1 percent to 30.58 per dollar as of 9:42 a.m. in Bangkok, according to data compiled by Bloomberg. The currency earlier rose by as much as 0.2 percent to 30.49.
Consumer prices rose 2.87 percent in February from a year earlier, easing from a five-month high of 3.03 percent the previous month, a commerce ministry report said yesterday.
Bank of Thailand policy makers raised the one-day bond repurchase rate by a quarter percentage point to 2.25 percent on Jan. 12. They next meet on March 9.