Baht Rebounds as Global Investors Boost Holdings of Thai Assets

Thailand’s baht rebounded from a one-week low as international investors raised holdings of the nation’s assets on optimism growth in Southeast Asia’s second-largest economy will improve this year.

Global investors poured a net $834 million into local equities this month through yesterday, stock exchange data show. The central bank raised its forecast for gross domestic product to grow 5.7 percent this year from 4.9 percent previously, and increased its estimate for average core inflation to 2.4 percent, Assistant Governor Paiboon Kittisrikangwan said on March 21.

“I am quite positive on the baht in the weeks ahead given that growth can do better due to flood rebuilding, domestic demand can be strong, and as the Bank of Thailand stopped easing,” said Nizam Idris, a currency strategist in Singapore at Macquarie Group Ltd.

The baht advanced 0.1 percent to 30.79 per dollar as of 14:28 p.m. in Bangkok, according to data compiled by Bloomberg. The currency slipped 0.1 percent this week and touched 30.86 earlier, the weakest level since March 15. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 6.525 percent. The central bank kept the benchmark interest rate unchanged at 3 percent this week, pausing after two reductions.

Thailand’s government would like to see lower interest rates and a weaker currency to help exporters cope with higher energy costs, Finance Minister Kittiratt Na-Ranong said yesterday. A range for the baht of between 32 and 34 would “be very good,” he told Bloomberg Television in Hong Kong.

Oil prices have held above $100 a barrel since mid-February and have climbed more than 7 percent this year to trade at $105.86 in New York.

The yield on the government’s 3.25 percent bonds due June 2017 declined one basis point, or 0.01 percentage point, to 3.62 percent, according to data compiled by Bloomberg. For the week, the rate rose one basis points.

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