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Baht Declines Most in Five Weeks on U.S. Budget Deadlock Concern

Thailand’s baht fell the most in more than five weeks as concern stalled U.S. budget talks will hamper efforts to revive the global economy reduced demand for emerging-market assets.

Congress will return tomorrow to resume negotiations aimed at averting more than $600 billion in automatic tax increases and spending cuts, due early next year, that could hurt the world’s largest economy. Huang Guobo, chief economist and director of the reserves management department at China’s State Administration of Foreign Exchange, said the nation doesn’t plan large economic stimulus measures, according to comments posted on Tsinghua University’s website.

“SAFE’s comment suggested that China isn’t going to play Santa and the U.S. Congress certainly isn’t inclined to do so,” said Vishnu Varathan, a Singapore-based economist at Mizuho Corporate Bank Ltd. “People are getting out of risk.”

The baht weakened 0.2 percent, the most since Nov. 16, to 30.65 per dollar as of 3:19 p.m. in Bangkok, according to data compiled by Bloomberg. The currency has gained 2.9 percent this year. One-month implied volatility, a measure of expected moves in exchange rates used to price options, held at 3.55 percent.

Thailand’s economy may grow at least 5 percent next year, supported by an export recovery and state investment, after expanding about 5 percent in 2012, Finance Minister Kittiratt Na-Ranong told reporters in Bangkok yesterday.

The yield on the government’s 3.625 percent notes due June 2023 declined one basis point to 3.53 percent, the lowest level since Dec. 6, data compiled by Bloomberg show.

To contact the reporter on this story: Liau Y-Sing in Kuala Lumpur at yliau@bloomberg.net

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

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