The baht plunged as much as 1.8% on Thursday, the biggest decline since 2007, to 30.226 against the dollar in early Asia trading. That almost erased all the gains it made in the past three sessions.
“It’s likely to be central bank intervention given that the central bank has mentioned that they’ll be fighting against baht strength,” said Mingze Wu, a foreign-exchange trader at INTL FCStone in Singapore. It may also have been due to traders betting the baht will strengthen overextending their positions, he said.
The currency appreciated almost 9% in 2019, the best performer in Asia, as its large current-account surplus lured investors seeking haven assets during an intensifying US-China trade war. Authorities have battled markets to keep gains in check, taking measures including interest-rate cuts and easing rules on outflows.
Liquidity in the currency market is normalising even as the baht remains volatile, Bank of Thailand assistant governor Vachira Arromdee said on Thursday. There still remains sharp fluctuations in the baht as the market adjusts to the buying and selling of dollars, she said.
Writer: Bloomberg News
Source: Bangkok Post