Baht Rises Most in a Week as Global Funds Buy Thai Stocks, Bonds

Thailand’s baht rose the most in more than a week as international investors added to holdings of the nation’s assets amid speculation global central banks will ease monetary policy to spur growth.

Overseas funds purchased $205 million more Thai equities than they sold last week and $815 million more government debt, according to data from the stock exchange and the Thai Bond Market Association. Minutes from the Bank of Japan showed policy makers aren’t ruling out any options to boost the economy, Thailand’s second-largest export market. The MSCI (MXAP) Asia Pacific Index of stocks advanced after a successful Italian government debt sale damped concern European nations won’t be able to fund their budget deficits.

“Financial markets have been quite stable recently, making it easier for investors to take some risks,” said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo. “There has been lingering speculation about monetary easing by central banks in major economies, which also encouraged some fund inflows to emerging markets. The inflows are providing support for the baht.”

The baht gained 0.1 percent from Aug. 10 to 31.44 per dollar as of 8:56 a.m. in Bangkok, according to data compiled by Bloomberg. The increase was the biggest since Aug. 6. Onshore financial markets were closed yesterday for a public holiday. Its three-month implied volatility, a measure of exchange-rate swings used to price options, dropped 24 basis points, or 0.24 percentage point, to 6 percent.

Government bonds were little changed. The yield on the 3.25 percent bonds due June 2017 held steady at 3.08 percent, according to data compiled by Bloomberg.

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

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.