Prasarn Trairatvorakul said the rapid strengthening of the Thai baht was probably due to positive news on the Thai economy which has contributed to the inflow of foreign capital.
Rumours in the money market that the Bank of Thailand (BoT) doesn’t have the money to intervene to stem the baht rise were groundless, he insisted.
The Thai baht appreciated to Bt29.38-29.40 against the US dollar on Tuesday – its strongest in the past two years and four months.
The rumours led to a swaying index in the Securities Exchange of Thailand (SET) on Tuesday as investors reacted nervously. Some were concerned that the government may issue measures to stop the foreign capital inflow.
The Thai stock index dropped 23.40 points to 1,568.25 when it closed on Tuesday.
Tawatchai Assawapornchai, Globex chief analyst, said the sharp decline in the SET index was due to investors’ anxiety over the government’s possible measures to curb the appreciation of the Thai currency which was its strongest level in five years.
Some investors decided to make profit given the skyrocketing index in the past few months, he said.