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Bank of Thailand Monitors Bahts Volatility Against US Dollar Rate

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On Wednesday, the Bank of Thailand (BoT) said it closely monitored capital movements and the baht against the US dollar Rate, saying it was prepared to respond to excessive volatility.

A weakening of the baht was caused by expectations the US Federal Reserve would tighten policy, as well as concerns over a global economic slowdown, according to Daranee Saeju, senior director at the Bank of Thailand.

Those factors have driven up the US dollar rate to its highest level in nearly two decades, causing a steady decline in regional currencies and the baht, she explained.

So far this year, the baht has lost 4.5% of its value against the greenback, compared with a decline of 3% to 7% in other regional currencies, she said.

The baht closed at 35.01 per US dollar rate on Wednesday, its lowest level in more than five years.

However, Ms. Daranee said, foreign investors have remained net buyers of Thai assets worth about 150 billion baht so far this year, including 130 billion baht in shares and 20 billion baht in bonds.

Inflation in Thailand Reaches 24-Year High

Meanwhile, Inflation in Thailand is projected to rise from 4.9% to 5.9% this year, the highest in 24 years, according to the Siam Commercial Bank.

Inflation is set to peak at 7% in the third quarter, before falling as domestic output increases and global economic conditions deteriorate the Siam Commercial Bank reported.

According to the bank’s Chief Economist, Somprawin Manprasert, the Economic Intelligence Centre has revised Thailand’s economic growth forecast from 2.7% to 2.9%.

Thanks to the tourism economic engine, which will see foreign arrivals increase from 5.7 million to 7.4 million by year-end, as a result of the further loosening of travel restrictions and improved performance in the service sector.

Read: Myanmar Moves Away from the Trading with the US Dollar Rate

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