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Baht Declines on Concern Importers Bought Dollars; Bonds Drop

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March 26 (Bloomberg) -- Thailand’s baht declined, erasing earlier gains, on speculation importers bought dollars to pay month-end bills. Government bonds fell.

The currency rose as much as 0.3 percent earlier after investors increased their holdings of the nation’s assets as it recovers from the worst floods in 70 years. Global funds bought $266 million more Thai equities than they sold last week, data from the stock exchange showed. Thailand’s Finance Ministry raised its 2012 growth forecast today to as much as 6 percent from a previous estimate of 5 percent.

“There could have been demand for the dollar from importers” ahead of the end of the quarter, said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. in Singapore. “Portfolio inflows will support the baht, capping its losses.”

The baht fell 0.1 percent to 30.81 per dollar as of 3:51 p.m. in Bangkok, according to data compiled by Bloomberg. The currency has advanced 2.4 percent this quarter.

The yield on the government’s 3.25 percent bonds due June 2017 rose two basis points, or 0.02 percentage point, to 3.64 percent, according to data compiled by Bloomberg.

High-yield bonds funds have taken in $25 billion so far this year, while those dedicated to emerging markets received almost $14 billion in a record start to a year as of the third week of March, according to data from U.S. research company EPFR Global.

To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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