Bank of Ayudhya: Thai baht may reach 4-yr high in 2018

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Bangkok – Bank of Ayudhya has forecast that the Thai currency in 2018 will reach a four-year high of 31.75 baht per US dollar, if the US Federal Reserve fails to raise interest rates as expected. It also believes the Bank of Thailand (BOT) will raise rates in the second half of 2018, should the Thai economy make a decisive recovery.

Tak Bunnang, Head of the Global Markets Group at Bank of Ayudhya, said the Thai currency in the first half of 2018 will appreciate to between 32.3 and 33.5 baht per US dollar, the strongest in four years. The likelihood of appreciation will increase if the Federal Reserve fails to raise interest rates in the second half of 2018. Investor money would flow to emerging markets, including Thailand.

Investors expect that the BOT’s Monetary Policy Committee will raise interest rates in the second half of 2018 from 1.5%, should the Thai economy make a decisive recovery and the inflation rate grow to 1.7%.

Towards the end of the year, the Thai baht is expected to range between 32.5 and 33 baht per US dollar. Bank of Ayudhya will continue to follow the monetary policy of the Federal Reserve, which will decide whether to raise rates this month. The bank will also stay informed of the economic policies of US President Donald Trump, which could affect the economies of Europe, Asia, and Thailand.