Thai Baht Has Second Weekly Decline on Intervention Concern

Thailand’s baht had a second weekly decline amid concern the central bank will intervene to halt appreciation that may hurt exporters. Bonds fell as the stock index reached its highest level since 1994.

The baht advanced 2.5 percent against the dollar this year, the best performance in Asia, as official data showed global funds purchased more than $5 billion of sovereign debt and equities than they sold during the period. The currency has started to stabilize after strengthening earlier in 2013, Bank of Thailand Governor Prasarn Trairatvorakul said yesterday. The central bank is ready to take measures “if the baht is distorted,” he said Jan. 31.

“There’s been some correction in the baht after quite a sharp rally this year, while there remains intervention concern,” said Tsutomu Soma, manager of the investment trust and fixed-income business unit at Rakuten Securities Inc. in Tokyo. “Funds will continue to flow into Asia where growth is solid. For bonds, it’s natural to think domestic investors are shifting funds to stocks that have really performed strongly.”

The baht slipped 0.2 percent this week to 29.85 per dollar as of 3:19 p.m. in Bangkok, according to data compiled by Bloomberg. The currency was unchanged today.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, dropped 33 basis points, or 0.33 percentage point, to 5.27 percent from a week ago. The rate fell five basis points today.

Official data on Feb. 18 may show gross domestic product increased 15 percent in the fourth quarter from a year earlier and 5.5 percent in 2012, according to the median estimate of economists in separate Bloomberg surveys.

The yield on the 3.625 percent government bonds due June 2023 rose 10 basis points this week and one basis point today to 3.64 percent, data compiled by Bloomberg show.

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