BANGKOK: Thailand’s baht and Indonesian rupiah led falls among Asian emerging market currencies as the dollar held firm on prospects of US interest rates staying higher-for-longer and surging crude prices counted against oil importing economies.
The baht depreciated by up to 0.6% to 36.785 per US dollar, on track for its worst day since Aug 3, as it remained under pressure due to surging oil prices, concerns over a widening financial deficit due to higher spending by the new Thai government and weak economic data.
“Financial stimulus of this size is likely to stoke inflation to some extent, especially if it happens alongside the continued recovery in tourism and the positive turn of the global trade cycle,” analysts at HSBC said in a note.
“If the stimulus pushes core consumer price index higher than what the Bank of Thailand (BoT) already expects for 2024, then there is the risk that the BoT will resume its tightening cycle.”
Analysts at Maybank expected the baht, which lost 2.7% in September quarter and is down nearly 6% so far this year, to see support for the currency at 37.07 and resistance at 36.
Meanwhile, Thailand’s benchmark share index was 0.4% higher, after reversing course from a 0.7% decline earlier in the day. Thai shares are the region’s worst performers, with the index 11.6% so far this year.
The Malaysian ringgit and Singapore dollar depreciated 0.2%, while the Philippine peso was largely unchanged. — Reuters
