Baht set for best weekly rally in year
- Published: 18 Jan 2013 at 10.24
- Online news: Local News
Thailand's baht was poised for its biggest weekly advance since December 2011, and government bonds rose, as global funds increased holdings of assets that offer higher yields.
The currency touched a 17-month high on Thursday as overseas investors bought US$2.6 billion more of sovereign debt than they sold this month and purchased a net $297 million of equities, Thai Bond Market Association and stock exchange data show. The baht retreated after Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said on Thursday that exporters will face difficulties if it strengthens further. The 10-year bond yields 3.7%, compared with 1.87% in the United States and 0.75% in Japan.
"Funds are flowing into the whole of Asia, especially Southeast Asia, and Thailand is one of the most attractive places," said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo. "It's possible to see smoothing operations to slow the pace of the appreciation, but they may not aggressively intervene to weaken the baht."
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