Bangkok, May 26 - Kasikorn Research Center stated that the baht continued to fluctuate in a wide range amid uncertainties on 3 main factors, namely US interest rates, the renminbi and the recovery of the Chinese economy. causing the baht to continue to fluctuate in a wide range by short term May adjust in the range of about 33.80-35.40 baht per dollar. But the second half of the year '66 There is still a momentum in Thai tourism, resulting in a better current account balance.

According to the Kasikorn Research Center, since the beginning of 2023, the baht has been oscillating in a wide range amid uncertainties on 3 main factors, from both foreign and Thai-specific factors. Investment status of foreign investors and the baht, consisting of 1) the reversal of their views on the US interest rate trend 2) the direction of the renminbi and its outlook on the Chinese economic recovery. and 3)

However, even though the political situation in Thailand Especially in May. 2023In the beginning of 2023, the main pressures will be on the side that allows capital to flow in baht appreciation In contrast, the US dollar weakened as financial markets weighed on the slowing inflation and US economy. and predicted that US policy interest rate near the highest point While the gradual opening of China's country has also boosted the yuan and strengthened the baht as well. However, the situation of the baht and the direction of foreign capital changed again in May. 2023, with foreign investors gradually reducing their portfolios in the Thai financial market. (Which makes the overall picture between 1 Jan. to 25 May 2023 foreigners have cumulative net sales of Thai stocks of about 89,144 million baht and has an outflow from the bond market of 43,085 million baht)

While the baht faced continued depreciation pressure. after depreciating past the 34.00 baht per dollar line Since mid-May 2023 as the market shifts its outlook on US interest rates. and the value of the yuan, together with the political factors in Thailand that must be monitored further Regarding US interest rates, even though the Fed is nearing the end of its rate hike cycle However, good labor market data and US inflation viscosity Causing the Fed to continue to signal strict control of monetary policy This may reduce the likelihood of an interest rate cut this year. The yuan, on the other hand, faced depreciation pressure in line with China's slow pace of economic recovery. While the political issues in Thailand are uncertain and the establishment of a new government will take time.

The volatility of the baht in 2023 has increased considerably. And the second highest in Asia by Kasikorn Research Center collecting the value of currency fluctuations in 2023, which NYU estimates. which from the model reflects that The volatility of most Asian currencies may move higher over the next 1 month. In terms of the expected volatility in period 1 The month ahead of the baht may move up to 8.4% higher than the average over the past month, which was 8.4%. 1%, with the volatility of the baht the second highest among Asian currencies. behind only the Japanese Yen. Although the volatility of Asian currencies and major currencies is a variable from the dollar. Especially the trend of the Fed interest rate. but must admit The high volatility of the baht in 2023 may be explained further by factors specific to Thailand. Especially the fluctuation of the baht in the direction of gold prices in the world market. (The volatility of the gold price is 12.3%) and political factors in the country. There are still many issues that need to be monitored even though the Thai general election has already ended.

As for the trend of the baht, it is expected that the baht will continue to fluctuate in a wide range. by short term May adjust in the range of about 33.80-35.40 baht per dollar. (Predicted by Kasikorn Bank) because there are many variables that can be flipped in two sides. Which causes uncertainty and must be monitored closely, especially 1. Negotiation process to reach a conclusion on raising the US debt ceiling If the situation is negative, it will increase the credit rating of the United States. And may pressure the dollar to weaken. 2. The direction of US interest rates. that the Fed may continue to send a strong control signal If US inflation It took a long time to adjust back to the target. (This will result in less chance of seeing the Fed cut interest rates this year.) 3. The political situation in Thailand, which if there is still uncertainty, will be a factor limiting the recovery of the baht, for example together

For the second half of 2023, Kasikorn Research Center views that There may be additional factors from the story. The situation and trend of the recovery of the tourism sector This will support the overall economy and current account balance. which is an important fundamental factor in the value of the baht, therefore, despite the volatile baht situation (It has a fast pace of movement that can change and flip) is not new. But it is still important that entrepreneurs in the sector should prepare carefully for this. And choose tools that are suitable for income-expense flows in foreign currencies. To cover the risk of exchange rates, such as forward contracts, which will specify the currency, amount, exchange rate level. and set a definite delivery date and/or a deposit account in foreign currency, FCD, which is suitable for businesses that have both receiving and paying in foreign currency.-Thai News Agency

Source: Thai News Agency