Thailand: Baht weakens in March
March 23, 2012
By 23 March, the Thai baht (THB) traded at 30.7 per USD, which was 1.0% weaker than the same day the previous month. At the current level, the baht is trading 1.7% weaker compared to the same month last year. The March reading follows on the almost uninterrupted downward trajectory since 29 February, when the baht reached a six-month high and closed at THB 30.2 per USD. The THB has depreciated on the back of lower risk appetite for emerging market assets as well as the Bank of Thailand's decision to maintain the one-day repurchase rate unchanged at 3.00% at its last policy meeting. According to market analysts, the THB is like to resume yet another upward trend, as the government plans to borrow THB 1 trillion (USD 32 billion), over the next two years to finance the fiscal deficit and infrastructure projects, including those aimed at preventing floods.
Author: Ricardo Aceves, Senior Economist