Monday, 3 March 2008

Baht continues to move in narrow range after capital control lifting

BANGKOK, March 3 (TNA) – The Thai baht continued to stay at around 31.50 to the US dollar in the Monday’s morning trading session after the Bank of Thailand’s decision to lift the 30 per cent reserve requirement took effect, according to a money dealer at Bank of Ayudhya Plc.

The dealer said the baht still moved in a narrow range near the level of last Friday’s close since the market waited to see the central bank’s contingency measures to rein in the currency volatility.

However, it is expected the baht would further appreciate because of foreign capital inflow and a dumping of the US dollar by exporters, who are afraid the baht would continue to strengthen.
Under the circumstance, the baht had an opportunity to appreciate further and break through the level of 31 to the dollar.

Charoen Iam-pattanatham of KTB Securities Co, projected more money would flow into the Stock Exchange of Thailand following the central bank’s move to end the capital control.

However, it remained to be seen whether the SET index would rise since the Dow Jones Industrial Average plunged on Friday’s night and other regional markets plummeted in pursuit of the US stock market in the morning trading session.

Meanwhile, Deputy Prime Minister and Commerce Minister Surapong Suebwonglee on Monday voiced confidence the baht would become stable within one week following the lifting of the capital control.

Commenting on the baht movement at around 31.50 to the dollar in the morning trading session, he said the central bank must closely supervise the currency to ensure it is stronger than other currencies in the region.

He believed investors and players in the money market would understand the situation soon and the currency volatility would ease within one week

Regarding news about the ousting of BoT’s Governor Tarisa Watanagase, he said he did not know where the news came from.

He affirmed the Finance Ministry and the central bank had coordinated performance efficiently. So, he saw "no need for a change of the central bank’s governor for now." (TNA) – E005