Thai baht hits nine-year high


dpa German Press Agency
Published: Tuesday December 12, 2006

Bangkok- The Thai baht hit a nine-year high against the greenback Tuesday, reaching 35.16 to the dollar by midday for the first time since October 1997, foreign exchange traders said. Thailand's currency has appreciated more than 13 per cent against the dollar this year as investors have pulled money out of the United States and invested it in Asia, causing Asian currencies to rise across the board.

Foreign exchange experts said the baht had appreciated against the dollar more than the currencies of its neighbours because the Thai currency had "underperformed" in recent years.

"The other Asian currencies recovered quicker than the baht after the 1997 [economic] crisis, so investors felt the baht was underperforming and have invested heavily here," said Kavalin Wangpichayasuk, a senior researcher at the Kasikorn Reeach Centre, an economic think tank.

She said the September 19 coup in Thailand had only temporarily slowed the appreciation of the baht this year.

"By November, investors were already confident in Thailand's political stability, and the baht had started to appreciate again," Kavalin said.

Other factors drawing foreign exchange flows to Thailand include the country's strong export performance this year and low inflation rate, she added.

© 2006 dpa German Press Agency