Thailand: Thai baht plummets in September
September 16, 2015
On 10 September, the Thai baht slumped to a new record low as it traded at 36.1 THB per USD. The figure was 3.1% weaker than on the same day in the previous month and 12.7% weaker on an annual basis. The baht has lost 9.8% of its value since the beginning of the year. The crash of the currency comes over concerns that Thai exports will record another weak annual variation in the third quarter due to underperforming global demand. Adding to that, anticipation of an interest rate hike in the U.S. later this month is adding pressure on the currency.
At its 15 September 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