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Thai baht set to weaken as US plan to tighten federal reserve

Thai baht is set to weaken following foreign capital outflows from the stock and bond markets.

The Thai baht today is traded at Bt35.13 per US dollar, gaining nearly 2 per cent since the beginning of this year.

Maybank Kim Eng Securities (Thailand) expects a reversal of the trend this month due to tightening by the US Federal Reserve.

Net foreign outflows yesterday were tuned at Bt6 billion: Bt2.4 billion from stocks, Bt2.8 billion from short-term bonds and Bt0.8 billion from long-term bonds.

Foreigners were also net sellers of Thai stocks and bonds on Monday, with net-sell positions worth Bt3.2 billion.

Thailand’s central bank governor Had previously said that a rapid rise in the baht was not good for the country’s economic recovery although it was not causing exports to decline.

Thai exports have faced several problems, including falling behind in technology innovation and a slow recovery in export markets, Bank of Thailand Governor Veerathai Santiprabhob, told reporters.

The currency had risen by 4% against the dollar last year, and Veerathai said its strength was not greater than other regional currencies. Exports also fell for a 4th straight year in 2016.

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