FILE PHOTO : Thai baht notes are seen at a Kasikornbank in Bangkok, Thailand, May 12, 2016. REUTERS/Athit Perawongmetha/File Photo
BANGKOK: Thailand’s central bank said on Monday it had observed occasional increases in the volume of foreign exchange transactions and might consider extra measures to limit speculation in the baht, Asia’s best performing currency this year.
The appreciation of more than 7% in the baht since the beginning of this year has been mainly caused by the depreciation of the dollar and an improved domestic economy, assistant governor Vachira Arromdee said in a statement.
“However, the financial market has become more volatile due to external factors, specifically geo-political risk and political issues in the US, thus, some market players might have used this opportunity to speculate on regional currencies which exerted pressure on the baht,” she said.
Therefore, the Bank of Thailand will require commercial banks to provide additional information in the event of an unusually high volume of transfers between non-resident baht accounts, which may relate to baht speculation, Vachira said.
“Looks like they are fighting hard today,” said Kobsidthi Silpachai, head of capital markets research of Kasikornbank.
“It signals to the markets that they are aware and are willing to take actions to prevent excessive FX moves motivated by speculation,” he said.
The baht eased to 33.26/28 per dollar after the statement from 33.16 earlier. - Reuters
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