Published: 10 May at 11 AM Tags: Dollar, America, Australia, USA, India, Japan, Thailand,
The Thai Baht declined to its lowest level in a week over speculation that the nationâ€™s Central Bank will cut interest rates after Finance Minister Kittiratt Na-Ranong announced that he would meet the central bankâ€™s policy committee on the 13 the of May.
The Minister has requested lower borrowing costs to stem fund inflows that sent the Baht to a 16-year high in April. Kittiratt has said that he wants the Central Bank to focus on the exchange rate and not just on inflation, The relatively high-strength of the Baht risks putting Thailand
at a disadvantage of its exports being more costly than its neighbours. The speculation over a rate cut has been increased following the easing of monetary policy in India
and South Korea whereas Thailand has maintained rates.
The Baht slumped 0.8%, the most since May 3, to 29.63 per Dollar as of 8:43 a.m. in Bangkok, trimming the weekâ€™s gain to 0.2%, it is still up 3.2% this year, the best performance in Asia. It reached 28.56 on April 22 and April 19, the strongest level since July 1997.
Thailandâ€™s interest rate of 2.75% compares with a maximum of 0.25% in the U.S. and 0.1% in Japan. It is still lower than neighbouring Indonesiaâ€™s 5.75%, the Philippines 3.5% and Malaysiaâ€™s 3%.
Thai Central bank Governor Prasarn Trairatvorakul said that the rate differential is a factor influencing capital inflows. He signalled he may be inclined to cut rates if economic growth starts to cool in the county.
As of Friday, 10th May 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP USD exchange rate was 1.536, GBP AUD exchange rate was 1.5318, GBP INR exchange rate was 83.9508, GBP JPY exchange rate was 156.0912, and GBP THB exchange rate was 45.6321.