The baht fell for a third day as slowing economic growth in China worsened Thailand's export outlook. Ten-year government bonds declined.
The International Monetary Fund (IMF) said this week there is an increasing risk that China's expansion this year will fall short of the fund's 7.75% forecast. Asia's largest economy is Thailand’s biggest market, buying almost 12% of shipments in the first five months of this year, official data show. Inflows into Thai stocks and bonds limited the baht's decline.
"Asian countries' dependence on China has been increasing and uncertainty surrounding China's growth is raising concern," said Tohru Nishihama, an economist covering emerging markets at Dai-ichi Life Research Institute Inc in Tokyo. "Thailand doesn't have many upbeat factors either."
The baht slipped 0.1% to 31.11 per United States dollar as of 9.52am in Bangkok, according to data compiled by Bloomberg. The currency gained 0.1% this week. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, rose three basis points to 6.91%. It climbed 51 basis points, or 0.51 percentage point, this week.
Thai exports rose 1.5% in June from a year earlier after a decline of 5.3% in May, according to the median estimate of economists in a Bloomberg survey before data due this month.
Foreign investors bought more Thai equities than they sold on each of the last seven days, boosting holdings by $283 million, exchange data show. Global funds purchased $319 million more local debt than they sold this month through Thursday after selling a net $1.5 billion in May and June, Thai Bond Market Association data show.
The yield on the 3.625% bonds due June 2023 rose one basis point on Friday and two basis points this week to 3.71%, data compiled by Bloomberg show.