Baht Falls a Third Day After G-20 Refrains From Censuring Japan

Thailand’s baht fell for a third day after the Group of 20 nations refrained from censuring Japanese policies that have weakened the yen, causing the dollar to strengthen against most Asian currencies.

The yen extended its loss against the dollar this year to 8.4 percent, while the Dollar Index, which tracks the greenback against the currencies of six major trading partners, advanced for a third day. Thailand’s gross domestic product increased 18.9 percent in the fourth quarter, compared with a revised 3.1 percent gain in the previous three months, according to official data today. The median estimate of economists in a Bloomberg survey was for a 15.3 percent expansion.

“With the G-20 past, the weaker yen trend is back and the dollar is rising broadly in the region,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo. “The scenario of strong growth in Thailand is still here, providing underlying support for the baht.”

The baht declined 0.2 percent to 29.91 per dollar as of 3:14 p.m. in Bangkok, according to data compiled by Bloomberg. It touched 29.94 earlier, the weakest level since Feb. 11. The baht has gained 2.3 percent this year. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, dropped 15 basis points, or 0.15 percentage point, to 5.27 percent.

Thailand’s economy expanded 6.4 percent in 2012, compared with 0.1 percent in 2011, today’s data show. Thailand sees export growth for this year at 11 percent, Arkhom Termpittayapaisith, secretary-general of the National Economic and Social Development Board, said today.

“Export growth represents inflows, which is supportive of the baht,” said Frances Cheung, a strategist at Credit Agricole CIB in Hong Kong. “But risk is the weaker yen. So, the baht may remain stable in coming months.”

The baht has started to stabilize after strengthening earlier in 2013, Bank of Thailand Governor Prasarn Trairatvorakul said Feb. 14. The central bank is ready to take measures “if the baht is distorted,” he said Jan. 31.

The yield on the 3.625 percent government bonds due June 2023 fell two basis points to 3.63 percent, data compiled by Bloomberg show.

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