Baht weakens as central bank to cut growth forecasts; bonds rise: BANGKOK, Oct 2 —Thailand’s baht fell by the most in five weeks as the central bank prepared to cut its 2013 economic growth forecast. Government bonds advanced. The Bank of Thailand plans to reduce its estimate on Oct. 25, Senior Director Mathee Supapongse said this week. The monetary authority trimmed the projection in July to 4.2 per cent from 5.1 per cent, and the Finance Ministry said last week it expects the economy to expand 3.7 per cent instead of 4.5 per cent this year. Global funds pulled a net US$65 million from equities in the first two days of this week, exchange data show. The baht lost 0.6 per cent, the most since Aug. 27, to 31.33 per dollar as of 4:38 p.m. in Bangkok after strengthening 0.6 per cent in the first two days of this week, according to data compiled by Bloomberg. One-month implied volatility, a measure of expected swings in the exchange rate used to price options, fell 15 basis points, or 0.15 per centage point, to 7.41 per cent. “The Thai economy still doesn’t look good and the central bank will lower the forecast again,” said Pareena Phuangsiri, a Bangkok-based analyst at Kasikornbank Pcl. “The baht can probably gain only to a certain level until we see signs of an economic pickup. So, we see a reversal from the recent appreciation.” Nomura Holdings Inc. lowered its growth forecast for Thailand’s economy this year to 3.5 per cent from 3.9 per cent while ING Groep NV cut its estimate to 3.2 per cent from 4 per cent, according to research notes released this week. The yield on the 3.625 per cent bonds due June 2023 fell eight basis points to 3.86 per cent, data compiled by Bloomberg show. — Bloomberg dlvr.it/447hvn
Posted on: Wed, 02 Oct 2013 10:58:53 +0000