BoT sees no unusual baht speculation

Dollar weakness and gold trade explain local currency strength, according to the central bank

- SOMRUEDI BANCHONGDUANG NAREERAT WIRIYAPONG

The Bank of Thailand has not detected any irregular speculation in baht trading, despite the currency’s continued appreciation against the greenback.

Chayawadee Chai-anant, assistant governor for the corporate relations group at the central bank, attributed the baht's strength primarily to a weaker dollar. Greater clarity in domestic politics also lifted investor confidence, while Thailand's gold trade further supported the currency, she said.

“Although the baht has appreciated against the dollar more than some regional peers, the central bank has not observed any irregular signs of baht speculation,” said Ms Chayawadee.

“Capital inflows into Thai markets remain normal.”

Year-to-date the baht has strengthened by around 7% against the dollar. Foreign capital recorded a net outflow from the Thai stock market, but a net inflow into the bond market.

During Sept 1-17, foreign investors posted a net capital outflow of about US$100 million from the Thai stock market, while the local bond market had a netinflow of $534 million, according to the central bank.

She said the central bank observed a decline in net errors and omissions in the balance of payments for September following data revisions.

The regulator also consulted with the Anti-Money Laundering Office to trace financial flows contributing to these errors and omissions.