Thailand Baht Sinks to Six-Year Low on Outflows Amid China Rout

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Thailand’s baht fell to its weakest level since September 2009 after foreign funds pulled money from local assets amid a rout in Chinese equities.

Global funds have withdrawn a net $199 million from Thailand’s shares and bonds this month, taking total outflows for 2015 to $1.2 billion, data compiled by Bloomberg show. The benchmark SET Index closed at the lowest level this year as investors grapple with potential risks stemming from Greece’s possible exit from the euro and whether China’s plunging stock market will worsen an economic slowdown.

The baht declined for a third day, retreating 0.2 percent to 34.011 a dollar as of 4:42 p.m. in Bangkok, according to data compiled by Bloomberg. The currency, which has lost 4.3 percent in the past three months in Asia’s second-worst performance, sank as low as 34.058 earlier. A gauge of dollar strength rose for a fourth day.

“Foreign outflows signal a weaker outlook for the baht,” said Thanomsri Fongarunrung, an economist at Phatra Securities Pcl in Bangkok. “The ongoing anxiety in China’s stock market and its economy has further weakened sentiment for the baht and other currencies in the region.”

China is the second-biggest export market for Thailand after the U.S., accounting for about 11 percent of total overseas shipments in the January-May period, according to figures from the commerce ministry statement. The Shanghai Composite Index has plunged 32 percent in the past month.

Thailand’s sovereign bonds climbed, pushing the 10-year yield down six basis points to a one-month low of 2.87 percent, according to data compiled by Bloomberg.

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