Baht Heads for 13-Year High as Yield, Growth Draw Funds, Kasikornbank Says
The Thai baht will appreciate 1.7 percent to its strongest level in 13 years by year-end as the central bank raises interest rates and overseas investors pour funds into the nation’s stocks, according to Kasikornbank Pcl.
Thailand’s third-biggest lender by assets predicts the currency will climb to 31 against the dollar by Dec. 31, from an earlier projection of 31.5, Kobsidthi Silpachai, Bangkok-based head of capital markets research at the bank, wrote in a report today. That would round out a 7.4 percent gain for the baht in 2010, its best annual performance since 2006, according to data compiled by Bloomberg.
Asia’s accelerating growth is promoting central banks in the region to withdraw stimulus measures put in place during the financial crisis. The Bank of Thailand will increase borrowing costs by a quarter-percentage point to 1.75 percent on Aug. 25, all but one of 12 economists surveyed by Bloomberg forecast, adding to last month’s first policy tightening since August 2008. Governor Tarisa Watanagase on Aug. 18 signaled currency gains that are in line with the regional trend can be tolerated.
