Baht Declines as Global Slowdown Concern Worsens Export Outlook

Thailand’s baht declined to a one- week low as concern that global growth is slowing worsened the nation’s export outlook. Government bonds held steady.

The International Monetary Fund cut its world expansion forecast for this year to 3.3 percent yesterday, the least since the 2009 recession, from a July prediction of 3.5 percent, citing an intensifying European debt crisis and a weaker U.S. economy. The Washington-based lender also lowered its estimate for China, Thailand’s largest overseas market.

“Asian nations like Thailand and Malaysia that depend on exports will see a bigger negative impact from the slowdown in external demand,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo. “Sentiment for the regional currencies will remain weak for now as growth concerns were highlighted by the IMF.”

The baht fell 0.2 percent to 30.72 per dollar as of 3:14 p.m. in Bangkok and touched 30.75 earlier, the weakest level since Oct. 3, according to data compiled by Bloomberg. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 4.27 percent.

Thai exports declined for a third month in August, falling 7 percent from a year earlier, government data show.

The yield on the 3.25 percent bonds due June 2017 was steady at 3.26 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.