Baht in record losing streak

Thailand's baht fell for an 11th day, the longest losing streak on record, on concern capital outflows will quicken amid prolonged political unrest in the country.

The currency touched the weakest level since March 2010, adding to the worst annual loss in 13 years, before a meeting today between the Election Commission and members of the ruling and opposition parties to find ways to ease tensions that have gripped the country since October.

Global funds pulled US$1.3 billion from Thai stocks last month, exchange data show. The central bank will review policy on Jan 22 after official figures showed exports contracted for a third month in November.

"Portfolio flows will be affected given the ongoing political situation," said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd in Singapore. "The question is whether the central bank is going to make any moves to ease policy."

The baht retreated 0.1% to 32.895 per dollar from Dec 27 as of 9.32am in Bangkok, according to prices from regional banks compiled by Bloomberg. It touched 32.958 on Thursday, the weakest level since March 1, 2010, after losing 6.9 % last year in the biggest yearly drop since 2000.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, was little changed at 6.91%, according to data compiled by Bloomberg.

Inflation Report

Consumer prices probably rose 1.6% in December from a year earlier, after increasing 1.9% the previous month, according to the median estimate of 17 economists in a Bloomberg survey before data due Thursday.

Overseas shipments declined 4.1% in November from a year earlier, according to a Dec 25 report. The Bank of Thailand cut its one-day bond repurchase rate by a quarter of a percentage point to 2.25% in November.

The anti-government protest group has not agreed to talk to the Election Commission at Thursday's meeting, Commissioner Somchai Srisuthiyakorn told reporters on Wednesday. The protesters have said they plan to shut down large parts of Bangkok starting Jan 13 to pressure the government to delay the Feb 2 general election and allow political reforms to take place.

The baht may pare declines once there is political clarity after the current deadlock is broken, according to a Dec 31 research note from Bank of Tokyo-Mitsubishi UFJ Ltd.

The yield on the 3.625% sovereign bonds due June 2023 was little changed at 3.93%, according to data compiled by Bloomberg.

Share your thoughts

Discussion 1 : 02/01/2014 at 10:41 PM
"The baht may pare declines once there is political clarity after the current deadlock is broken," Well at least our forward guidance is in the capable hands of these captains of the obvious. How much do analysts make again?
Discussion 2 : 02/01/2014 at 06:14 PM
Sometimes do i think.. Is this the karma.....
Discussion 3 : 02/01/2014 at 03:12 PM
The baht will drop back to a more farang friendly level of 40 to 1 USD by summer, and remain there a while.
Discussion 4 : 02/01/2014 at 12:16 PM
The baht may pare declines once there is political clarity after the current deadlock is broken, according to a Dec 31 research note from Bank of Tokyo-Mitsubishi UFJ Ltd. Do these people have any idea what's going on in Thailand?.......or are they using their crystal ball to look at 2015/16, the baht has a long way down to go yet and about time too
Discussion 5 : 02/01/2014 at 11:20 AM
The financial crash is inevitable with a government like this. Better prepare yourself.

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