BoT: European elections, the cause of forex volatility

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BANGKOK, 11 May 2012  – The Thai central bank chief has blamed political uncertainties in Europe for the volatility in global currency values. 

Bank of Thailand (BoT)’s Governor Prasarn Trairatvorakul said that worries from elections in Europe have led to fluctuation in the world money market.

He said that political uncertainties there have scared investors to mobilize their funds to assets with lower risks, such as the US dollar.

However, Mr. Prasarn is optimistic that such volatility will be short-lived and the market will soon be able to adjust itself.

The BoT chief added that the weakening baht is nothing out of the ordinary as its movement remains in line with regional currencies and the central bank needs not to intervene yet.

Still, he conceded that all factors are to be closely monitored for a while, particularly the policies of the new French government under the leadership of Mr. Francois Hollande and the formation of the new government in Greece.