Thailand’s baht was steady, erasing its earlier losses, as political turmoil in the Middle East pushed up oil prices, raising concern global economic growth will slow.
Crude for April delivery rallied past $100 a barrel and U.S. Federal Reserve Chairman Ben S. Bernanke said yesterday a sustained jump in the price of oil threatened to cause slower growth and higher inflation. Rising commodity costs resulted in Thailand’s current-account surplus shrinking to $1.09 billion in January from $1.75 billion in December, the central bank said last month. The country has increased borrowing costs four times since June.
“Thailand relies on imported oil, so higher crude prices will be negative for the current account,” said Vishnu Varathan, an economist in Singapore at Capital Economics (Asia) Pte. “Inflation is becoming a big concern. We believe the Bank of Thailand will continue to tighten.”
The baht was little changed at 30.55 per dollar as of 3:10 p.m. in Bangkok, from 30.56 yesterday, according to data compiled by Bloomberg. The currency earlier fell by as much as 0.2 percent to 30.61.
Consumer prices rose 2.87 percent in February from a year earlier, easing from a five-month high of 3.03 percent the previous month, a commerce ministry report said yesterday.
Bank of Thailand policy makers raised the one-day bond repurchase rate by a quarter percentage point to 2.25 percent on Jan. 12. They next meet on March 9.
The five-year government bonds fell. The yield on the 3.125 government bond due December 2015 rose four basis points to 3.46 percent today. A basis point is 0.01 percentage point.