Thai Baht Has Second Weekly Loss on Outflows From Stocks, Bonds

Thailand’s baht completed a second weekly loss as concern Europe’s debt crisis will worsen sapped demand for emerging-market assets.

The baht touched its weakest level since August 2010 today after overseas investors sold $139 million more Thai shares than they bought this week through yesterday and pulled $262 million from government debt, according to the stock exchange and the Thai Bond Market Association. The European debt crisis is growing to the point that it won’t be solved by one group of countries, Christine Lagarde, the managing director of the International Monetary Fund said yesterday.

“Investors are becoming risk averse because of Europe’s debt concern and therefore, we are seeing some fund outflows from Asia,” said Kozo Hasegawa, a trader at Sumitomo Mitsui Banking Corp. in Bangkok. “The baht will be influenced mainly by external factors rather than domestic factors, at least until the end of the year.”

The baht dropped 1.3 percent this week to 31.35 per dollar as of 3:14 p.m. in Bangkok, according to data compiled by Bloomberg. The currency touched 31.48 today, the weakest level since Aug. 26, 2010, before trading little changed from yesterday’s close. It may trade between 31.20 and 31.50 next week, Hasegawa said.

The central bank has no concerns about the recent weakness in the baht because it moves in line with other regional currencies, Governor Prasarn Trairatvorakul said today. Eight of 10 most-traded currencies in Asia excluding the yen weakened against the greenback in the past month, led by the Indian rupee’s 4.3 percent slide.

The yield on the 3.25 percent debt due June 2017 rose four basis points, or 0.04 percentage point, to 3.10 percent today, according to data compiled by Bloomberg. The rate was unchanged from a week ago.

To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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