Thailand’s baht is on track to have its worst January since 2020, with a loss of nearly 4% against the US dollar. The currency has gone from being the top-performing currency in emerging Asia in the fourth quarter of last year to the biggest loser this year. Global funds are shunning Thai assets due to concerns about the country’s economic stimulus efforts.
The government and central bank are engaged in a debate on how to stimulate the economy, with the deputy finance minister expressing concerns about high borrowing costs holding back recovery. However, the central bank has resisted calls for rate cuts, stating that lower borrowing costs cannot address structural problems in the economy.
The growing political backlash against the current level of policy rates is expected to continue weighing on the baht. Foreign investors have already pulled out a significant amount of equity from the country, and the stock index has reached a three-year low. The recent bond defaults and accounting scandal have also led to outflows in the debt market.
Traders are keeping an eye on Wednesday’s data to see if the country’s current account improved in December. Efforts to boost tourism, such as waiving visa requirements for Chinese travelers, are expected to have a positive impact on the baht. However, there are concerns about the weak Chinese economy and potential delays in the Federal Reserve’s rate hikes, which could further pressure the baht.
READ MORE STORIES: https://bangkokone.news
