Thai baht likely to drop to 36 baht against US dollar this month

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BANGKOK, 11 September 2015 -The Thai baht could weaken further as the American Central Bank or Fed will likely raise its interest rate policy this month.

According to Kasikornbank Head of Capital Market Research Kobsit Silpachai, the Thai export sector could experience another contraction for the 3rd consecutive month due to the underperforming global economy and declining oil prices.

Prices of everyday items and farm products will also decrease as a result of these factors. The Thai economy is expected to grow by only 2.3% despite government spending and tourism revenues. The maximum growth may reach 2.8% if the export sector performs better this year.

As the U.S. Fed is predicted to revise its interest rate 3 times within the next 12 months, with the first one expected in September, the Thai baht could drop further to 36.75 baht against the US dollar, given the forecast for the end of this year and the weakening Yuan. It might drop further to 38 baht in late 2016.

Meanwhile, a senior economist at the Asian Development Bank, Laksamon Attapit, said the government spending and economic measures would begin to show significant results next year rather than within 2015, as it required some time for the money to be injected into the economy.