Baht Reaches Week’s High on Flood-Insurance Inflows, Greece Deal

Thailand’s baht rose to this week’s high before trading little changed on speculation overseas insurance companies are stepping up purchases to pay claims related to the nation’s worst floods in almost 70 years.

Exchange data showed international investors bought $209 million more Thai equities than they sold in March. Private investors agreed to swap about 85 percent of their Greek government bonds for new securities in a deal that closed yesterday, according to a banker briefed on the results.

“There remains speculation about insurance inflows in relation to the floods, which supports the baht,” said Satoshi Ushijima, vice president of the treasury division in Bangkok at Mizuho Corporate Bank Ltd. “In addition, the risk-on mood is prevailing in the market due to developments in Greece.”

The baht was little changed at 30.53 per dollar from a week ago as of 8:52 a.m. in Bangkok after reaching the high of 30.50, according to data compiled by Bloomberg. One-month implied volatility, a measure of price swings used to price options, was unchanged at 6.5250 percent.

Prime Minister Yingluck Shinawatra said on March 7 the economy may expand between 5.5 percent and 6.5 percent this year following 0.1 percent growth in 2011.

The yield on the 3.25 percent government bonds due June 2017 rose two basis points, or 0.02 percentage point, to 3.42 percent this week, according to data compiled by Bloomberg. The rate was unchanged today.

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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