Thailand’s baht rose, erasing its
losses since a May 22 coup, as an end to seven months of street
protests and a planned pickup in government spending help
attract overseas funds to the nation’s assets.
Military rulers led by Army Chief Prayuth Chan-Ocha
suspended the constitution and used powers under martial law to
ban political activities. At the same time, they have vowed to
accelerate budget spending and restarted payments to farmers
under a disputed rice-purchase program. Global funds pumped $561
million into Thai stocks and bonds this month through yesterday,
after pulling $2.24 billion out in May, exchange data show.
“With the military coup, the perception is there’s a bit
of stabilization,” said Vishnu Varathan, a senior economist at
Mizuho Bank Ltd. in Singapore. “At least there’s not going to
be an immediate, imminent and uncontrollable bloodshed on the
streets. That I think led to a bit of a buyback opportunity”
for the baht, he said.
The baht rose 0.2 percent to 32.388 per dollar as of 12:20
p.m. in Bangkok, headed for a 0.3 percent weekly advance,
according to data compiled by Bloomberg. The currency had traded
at 32.40 immediately prior to the May 22 coup. The SET Index of
shares gained 0.3 percent, while the yield on 10-year government
bonds increased one basis point to 3.86 percent.
One-month implied volatility, a measure of expected
exchange-rate moves used to price options, dropped 23 basis
points to 5.15 percent. The gauge declined 42 basis points this
The Thai economy will start to recover this quarter and
gain more momentum in the three months through September as
local demand improves in line with easing political concerns,
Don Nakornthab, director for Bank of Thailand’s macroeconomic
policy, told reporters in Bangkok on June 10.
Gross domestic product fell 0.6 percent in the first
quarter from a year earlier, compared with the median estimate
in a Bloomberg survey for a 0.4 percent increase. The economy
shrank 2.1 percent from the previous three months.
Thailand’s monetary policy is accommodative and will help
support the nation’s economic recovery, central bank Governor
Prasarn Trairatvorakul told reporters yesterday. The Bank of
Thailand, which has cut the benchmark interest rate three times
in the past year to 2 percent, will next review borrowing costs
on June 18.
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Lilian Karunungan in Singapore at
To contact the editors responsible for this story:
James Regan at
Thai Baht Erases Post-Coup Loss as Junta Ends Months of Protests