Halister News

(Bloomberg) -- Further appreciation in the baht might derail Thailand’s economic recovery, a concern the central bank “has to monitor closely”, BOT Assistant Governor of Financial Markets Chantavarn Sucharitakul, says in an e-mail interview.

• Baht’s appreciation may have hurt cash flows of local exporters due to translation losses when their revenues are converted into the local currency, she says
• The Southeast Asian currency reached 34.50 at the end of last wk, its strongest level since July 2015
  • Baht is currently trading 0.2% lower at 34.690 per dollar
• Thailand’s bond and equity mkts received inflows so far this year, a reflection of investor sentiment over global recovery and monetary policies of major economies, Chantavarn says
  • “Given that the inflows are externally driven, the reversal process is inevitable and the best that a recipient economy can do is to ensure that it is resilient and sufficiently well balanced to be able to absorb shocks from both sides, be they inflows or outflows,” she says
• Asked about plans to increase Chinese assets, she says BOT has been gradually adding investments in China’s interbank bond market based on liberalization for official institutional investors
• NOTE: Thailand’s bond mkt took in YTD net inflows of $10.3b as of Aug. 19 while the equity mkt saw net inflows of $3.04b during the same period, according to data compiled by Bloomberg