Baht Places as Top Outperformer among Asian on Tourism Rebound Bet
Baht Places as Top Outperformer among Asian on Tourism Rebound Bet
Baht Places as Top Outperformer among Asian on Tourism Rebound Bet
20 พ.ค. 2563

After experiencing a currency depreciation for most of the year, Thai Baht has shown a sharp rebound to outperform among Asian countries. Baht improved nearly 1.5% in May after shrinking more than 7% in the first four months of 2020. It expects that tourism-dependent economy will recover soon as the economic activities start to resume. 
 
“The sooner availability of a vaccine will mean a quicker recovery in industries such as retail and tourism, and as such currencies relying more on these sectors may respond more,” said Frances Cheung, Singapore-based head of Asia macro strategy at Westpac Banking Corp.
 
Yanxi Tan, a foreign exchange strategist at Malayan Banking Bhd. expects the baht to rise to 31.7 per dollar by year-end as the pandemic dissipates. 
 
However, Thai Baht is still in risk as the government has warned that the economy this year  could contract as much as 6% caused by the Covid-19 outbreak. Several economists are highly expecting the Bank of Thailand to cut its policy interest rate by 25 basis points to 0.50% – which will be the fifth reduction in borrowing costs since August – on the upcoming policy review of BOT on this Wednesday.
 
“Thailand has done well to contain the coronavirus outbreak, with the country gradually reopening businesses and easing restrictions,” says Chang Wei Liang, a macro strategist at DBS Bank Ltd. in Singapore. “This has given investors confidence that tourism could recover over time, in turn supporting the baht.”