Fueled by mounting worries over China’s plunging stock markets, the Thai Baht Wednesday sunk to its lowest level against the US dollar in six years.
The Bangkok Post reports that the Baht “retreated for a third straight session” on Wednesday and
slipped through the 34 level in the early morning and weakened to the day’s trough of 34.06 – the steepest point since September 2009 – before climbing back to just shy of 34 in late trade.
According to Bloomberg, the Baht has now
lost 4.3% in the past three months in Asia’s second-worst performance.
Kasikornbank analysts expect the Baht to depreciate even further in the medium term, possibly to “34.20-34.30 in the coming weeks” and “34.50 to the US dollar at the end of 2015.”
Thanks to the kingdom’s reliance on exports and tourism, China’s stock market crash of the last few days has had a considerably greater impact on Thai financial and capital markets than the Greek debt crisis.
The Bangkok Post:
China is the No.2 destination for Thai shipments after the US, representing 11% of total exports during the five months through May. China is also Thailand’s biggest tourism market: the number of Chinese tourists who visited Thailand in the first half more than doubled to 4 million, generating 191 billion baht in income.
Unfortunately it seems, many tourists and expats will argue, the Baht has weakened perceptibly only against the US dollar so far, while it remains as strong as usual against other currencies like the Euro or the Australian dollar.