Thai Baht Rises to Seven-Month High on Export Rebound, Inflows

The baht climbed to a seven-month high after Thailand’s exports rebounded and global funds increased investment in the nation’s assets.

The currency advanced as much as 0.4 percent to 31.993 per dollar, the strongest since Dec. 17, before trading at 31.995 as of 3:35 p.m. in Bangkok. It has gained 1.4 percent in July, the second-best performance among 24 emerging-market exchange rates tracked by Bloomberg. The SET Index of shares rose 0.3 percent to 1,537.99, headed for its highest close since June 2013.

Exports rose 7.2 percent last month from a year earlier, Junta leader Prayuth Chan-Ocha said in a July 18 television address. That would be the first increase in four months and beat the 3.1 percent estimate in a Bloomberg’s survey.

“The rebound in exports may support the baht’s additional strength in the short term,” said Tim Leelahaphan, an economist at Maybank Kim Eng Securities (Thailand) Pcl. “A better economic outlook has also attracted foreign fund inflows into domestic bonds and stocks.”

Global investors poured a net $165 million into Thai debt and equities on July 18, taking this month’s inflows to almost $3 billion, according to a data compiled by Bloomberg.

Foreign funds have plowed money into Thai stocks and bonds as the junta accelerates state spending to revive the economy. On July 15, the National Council for Peace and Order, a group of military leaders, approved a new budget starting Oct. 1 with a 2 percent increase in investment in projects including train networks and water management.

The yield on the 3.875 percent government bonds due June 2019 slipped two basis points, 0.02 percentage point, to 3.04 percent, the lowest level since May 23.

The baht may drop to as low as 33.5 per dollar by year-end as a predicted increase in U.S. interest rates may trigger fund outflows, according to Maybank Kim Eng’s Tim.

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