BANGKOK, 5 June 2013 The Bank of Thailand (BoT) has warned the country regarding the fluctuation of the Thai currency, reasoning that the baht has been appeciating against other currencies since the beginning of this year even though its value has dropped slightly recently, thanks to the bank’s interest rate policy.
According to the BoT, capital outflow in May has caused the Thai baht to depreciate. the Bank is urging all investors to be cautious and keep a close watch on the currency situation, adding that the baht could be volatile, moving up and down every day.
The bank said the factor behind the devaluation of baht was the cut in the policy interest rate by 0.25 percent. The interest rate cut was an attempt to bolster economic growth.
The BoT also said the Chinese economy has begun to slow down, expanding only 7.7 percent in the first quarter of 2013, adding that the lower-than-expected growth could affect investors’ confidence in the second quarter, and will likely have a negative impact on the entire region as all Asian countries are connected.