Thailand’s central bank ready to manage ‘volatile’ baht

Thailand’s central bank ready to manage ‘volatile’ baht

(Reuters) – Thailand’s central bank said on Friday it was closely monitoring the baht and was ready to manage any excessive moves in the currency, which reached its weakest level in nearly 16 years.

The baht, one of the worst-performing currencies in the region, hit 37 baht against the US dollar on Friday, the lowest since December 2006. It has weakened about 10% against the dollar so far this year.

The Bank of Thailand (BOT) said in a text message to reporters that the baht is more volatile mainly due to external factors, including expectations of sharper increases in US interest rates and deteriorating risk sentiment in emerging Asian markets after it fell below 7 against the dollar.

In the statement, Alisara Mahasandana, assistant governor, said there was also a limiting factor for Thailand due to lower gold prices, which led to increased dollar buying by gold companies.

“The BOT is closely monitoring the movement of the baht and is ready to take action when the baht moves in an unusually volatile manner so as not to affect the adjustment of the real economy,” she said.

She noted that the currency tends to become more volatile, especially when its value after 37 baht fell to the level of the dollar.

She added that BOT urged companies to manage risks to mitigate the effects of high volatility in financial markets.

READ ALSO :   Brokers shoot food prices up to four times

Newsletter Updates

Enter your email address below to subscribe to our newsletter