Thailand: Thai Baht falls to multi-year low in August
August 19, 2015
On 18 August, the Thai baht slumped to a six-year low as it traded at 35.5 THB per USD. The figure was 4.0% weaker than on the same day in the previous month and 11.7% weaker on an annual basis. The baht has lost 7.8% of its value since the beginning of the year. The crash of the currency came over concerns that the unprecedented bomb attack in Bangkok on 17 August would hit the tourism sector, which is vital for the economy. The attack comes after latest GDP data showed that the Thai economy slowed in Q2. Adding to that, this year, exports are expected to suffer due to the devaluation of the Chinese yuan on 11 August.
At its 5 August monetary policy meeting, the Bank of Thailand (BoT) kept its monetary policy rate unchanged at 1.50%. While the economy remains sluggish and consumer prices continue to record drops in annual terms, the depreciation of the currency has reduced the chances of an interest rate cut in the near term.
Author: Dirina Mançellari, Senior Economist