Thai central bank ready to act if baht is too volatile

THAILAND’S central bank said on Tuesday it was closely monitoring the Thai baht and is ready to take action if moves in the currency are unusually volatile.

The depreciation of the baht has been mainly driven by external factors, the Bank of Thailand (BOT) said in a statement. The baht was at 34.22 per dollar at Tuesday’s close, the weakest level in almost five years.

The US Federal Reserve’s tendency toward tighter-than-expected monetary policy has continued to push up the dollar, causing regional currencies, including the baht, to fall, the BOT said.

Since the start of the year, the baht has depreciated 2.5 per cent against the dollar, while regional currencies have fallen between 1 per cent to 5.5 per cent, according to the BOT.

Concerns about China’s slowdown following persistent lockdowns have also weighed on regional currencies, while the baht faced additional short-term pressure from dividend repatriation of foreign investors, it said.

The private sector should regularly manage risks to reduce the impact of financial market volatility at a time of high uncertainty, the central bank said. AFP