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Thai Baht Continues to Tank as Foreign Investors Leave Thailand



Thai Baht, Economy, Thailand, Bank

Krungthai Bank market strategist Poon Panichpibool reported yesterday the Thai Baht is likely to move between 32.80 and 32.95 as foreign investment continues to leave the Kingdom.

He said foreign investors had decided to sell their assets in Thailand due to uncertainty caused by the Covid-19 situation in the country. He also this would lead to a gradual weakening of the baht.

Meanwhile, the baht’s weakening will lead to importers exchanging the Thai currency for dollars, or other foreign ones. The baht would tend to weaken, or stabilize at 32.70 to the US dollar.

However, Poon predicted that the Bank of Thailand would sell dollars or other foreign currencies in order to ease the baht’s fluctuation, or delay its weakening.

Poon added that the dollar would strengthen due to market players’ concerns about the Covid-19 situation around the world, which had increased the demand for safe haven assets. In addition, this strengthening is another factor in weakening the baht, he added.

Meanwhile, Asian equities extended losses Tuesday following another rough day for global markets as the fast-spreading Covid Delta variant fuels concerns over the expected economic recovery.

Investors have been rattled in recent weeks by data showing the highly transmissible virus surging across the world, forcing some governments to reimpose containment measures.

Even countries with elevated vaccination rates have seen a big increase in new cases, though observers point out that hospitalizations and deaths are being kept down thanks to the jabs.

The selling has also been blamed on other factors including lingering worries about possible central bank policy tightening as the economy recovers, profit-taking with markets sitting around record or multi-year highs, and investors jockeying as the corporate earnings season begins.

The worry on trading floors was reflected in demand for safe-haven assets including US Treasuries, the yen, and gold. Bitcoin fell to as low as $29,516 and below $30,000 for the first time in a month, having hit a record near $65,000 in April.

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