The Thai baht continued to weaken on Thursday after the resignations of Deputy Prime Minister Somkid Jatusripitak and four other key officials, reflecting foreign investors’ concerns about the continuity of the government’s economic policies.
The baht is now Asia’s weakest currency against the US dollar on a year-to-date basis, down 5.5%, according to Reuters.
The local currency’s value fell to 31.69 per US dollar as of 6.54pm on Thursday from 31.56 on Wednesday. The baht touched 31.76 at one point on Thursday.
The latest development is in stark contrast with last year’s currency movements. The baht emerged as Asia’s top-performing currency in 2019, eclipsing the 30-baht-per-dollar mark before the New Year, driven by the country’s large current account surplus and ample foreign reserves.
For the first five months of the year, net foreign outflow from the Thai bond market stood at 150 billion baht.
But the market booked net foreign capital inflows worth 30 billion baht in June and a further 10 billion baht in July.
This movement reflects the improved confidence of offshore investors, mainly due to the government managing to contain the coronavirus outbreak.
But Thailand’s stock market has seen net foreign outflow worth 221.6 billion baht year-to-date.
Mr Somkid and the others tendered their resignations on Wednesday after mounting pressure from the Palang Pracharath Party (PPRP) amid a leadership reshuffle.
The resignations will clear the way for a cabinet shake-up demanded by the PPRP after supporters of Deputy Prime Minister Prawit Wongsuwon pushed for him to become the new party leader last month, replacing Finance Minister Uttama Savanayana.
The reshuffle of the government’s economic team has caused jitters among foreign investors, who are concerned about continuity in the government’s policies — especially with regard to the Eastern Economic Corridor, a special economic