Analysts say the baht has fallen sharply since government aide Kithirat Naranon was appointed as the Bank of Thailand's new chairman, raising questions about the central bank's autonomy and pushing the baht lower. The dollar is on track to fall below the main resistance level of 35 baht to the dollar.
The baht fell from 34.02 baht to the dollar on Friday to 34.37 baht on Monday after the chairman selection committee selected former deputy prime minister and finance minister Khitirat as the fifth acting chairman. did.
The Thai currency fell further to $34.7 on Tuesday and fell to a three-month low of $34.9 to the dollar early Wednesday, before recovering to $34.77 later that day.
The baht, at 34.77 to the dollar, has fallen 7.5% so far this quarter, in line with the Malaysian ringgit and the 7.4% yen depreciation, but far outpacing the 2.8% decline in the Chinese yuan.
According to the Kasikong Research Center, the Korean won depreciated by 6.6% and the Philippine peso depreciated by 4.5% during the same period.
Kanjana Chokpisanshin, head of research, banking and financial sector at the think tank, said, “The main factor pushing the baht down is the dollar's strength. Donald Trump's victory in the US presidential election on November 5 has caused the dollar to weaken. “It has increased significantly.”
Trump's victory has put pressure on Asian currencies, led by the renminbi.
He said the prospect of high tariffs under his administration could keep U.S. inflation high and cause the Federal Reserve to slow the pace of interest rate cuts next year, but the central bank said it would He said there was a possibility of another rate cut at the meeting.
“Another factor behind the depreciation of the baht is 'domestic factors' leading to capital outflows from Thailand's stock and bond markets,” Kanjana told the Bangkok Post. He added that this could lead to an early interest rate cut. The market is expected.
Kittilat, a member of the ruling Thailand Contribution Party, has been a vocal critic of the central bank's hawkish monetary policy.
He said from October 1 to November 12, 130 billion baht worth of foreign funds flowed out of Thailand's stock market, and a further 67 billion baht flowed out of the bond market.
Thanomsak Saharachai, senior assistant managing director of research at Krungtai Exspring Securities, said Trump's victory will cause investors to dump Asian and European assets and buy US assets and Bitcoin instead. He said he did.
As a result, dollar and US bond yields have surged and are expected to rise further, putting downward pressure on the baht, he said.
Analysts at Maybank Securities (Thailand), who requested anonymity, echoed similar views, noting that the currency's main resistance point is currently 35 baht to the dollar.
The analyst said the baht was expected to weaken in the fourth quarter, although public opinion could change the situation.
The analyst said, “If the Constitutional Court convicts former Prime Minister Thaksin Shinawatra on November 22nd for allegedly influencing the Pro-Thailand Party, the baht could fall below 35.5 baht to the dollar. There is,” he said.
