Central Bank intervention is never a good sign...
BANGKOK (AFX) - Bank of Thailand (BOT) has again intervened in the foreign exchange market to slow the baht's sharp rise against the dollar, the bank's governor Tarisa Watanagase said.
"The Bank of Thailand wants to reaffirm that we will intervene only when needed, and at the moment the baht has stabilised," Tarisa told reporters.
The bank also intervened on Friday, but Tarisa again refused to say how much the bank had spent to soften the currency, which is trading near a seven-year high.
She said capital inflows from the US, the main factor behind the baht's rise, has slowed down.
But she said the bank will closely monitor the inflows due to fears of speculation.
"Most of the capital inflows are short-term investments in the stock and bond markets, in which case the investment is quickly transferred, which is different from foreign direct investment, which is more long term," she said.
She said the other reason for the baht's appreciation was expectations that the US economy will weaken due to a softening property market.
However she insisted that a strong baht will not hurt Thai exporters because the central bank has sent signals since early in the year that the local currency would appreciate.
BOT's assistant governor Atchana Waiquamdee said gains in the baht would track the rise of other regional currencies -- assuming the Chinese yuan also strengthens.
"Regional currencies including the yen, the Singapore dollar, the Philippine peso, the rupiah and the won are expected to strengthen further, mainly due to the yuan's strengthening," she said.
The baht closed today at 36.78-80 to the dollar compared to Friday's close of 36.87-89.
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that's a mighty fine sentiment
Although without the sense of humour obviously!!!
