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Warn to deal with the beginning of the year 64, “Solid Baht” has exceeded 29 baht / dollar. Watch for the flow of funds to Asia. “SCB Securities” notes that during the first two months, the funds were poured back into Thailand, “Krungsri” assesses that the Bank of Thailand does not use strong drugs to guard the baht – short-term focus on speculative “spot” bank “” Kasikornbank “Reduction of the national policy rate for the first quarter of next year by 0.25% to support the slow recovery and the weakening of the economy.
The flow of funds poured out strong baht continued.
Dr. Jitipon Pruksa Metanan SCB Securities Chief Investment Office Senior Director (SCBS CIO) revealed that “Prachachat Business” said that the trend of the baht should still appreciate quite a bit in early 2021, especially during the first 1-2 months, which may be appreciating. To reach the level of 28-29 baht per US dollar As the direction of money flows into the region (flow of funds) continues AND is just beginning to flow
Therefore, at the beginning of the year there should still be more flows. Because foreign investors will adjust their portfolios to move more money to invest in Asia, while importers-exporters will have to sell the dollar to maintain liquidity ready to do business. While expected by the end of this year, the baht will be at the 30-30.2 baht per dollar level.
“Now the flow has just started. There is another opportunity to get in. During the first 1-2 months, it is up to the Bank of Thailand if there is no specific policy to attend to. The baht should be strong quickly. But if there is retaliation, it should slow down. And from the second quarter onwards, the baht should move in the range of 29-30 baht per dollar. As still waiting for clarity on the new coronavirus vaccine. Including international political factors, if the baht appreciates from this year at 3-4%, it is an acceptable level, “said Dr. Jitipon.
Naris Sathaphondecha, director of TMB’s Center for Economic Analysis, said the dollar trend will weaken next year. And the market is in a state of risk exposure (activated risk), so the baht should have a strong direction.
Baht Q4 63, strong 4.1%
Mr Isak Bunnag, Global Market Director Bank of Ayudhya said in the past that he could see the baht adjusted from the COVID-19 situation in the first quarter 2020 depreciation of 8.63%, while the Indonesian rupiah fell depreciated 14.98% and the fourth quarter. The Thai baht reversed and tended to appreciate. But not the most grateful.This was due to the appreciation of the Indonesian currency of 4.91%, while the baht appreciated 4.1%, however, in November, the baht appreciated rapidly. Because investors tighten their portfolios in anticipation of a new round of investment After the good news, clarity on the US elections AND vaccine development, but overview of the first 11 months of this year Thai baht still depreciates 1 %
The trend of the baht in 2021 is considered strong at 29.25 baht per dollar. From the forecast frame it is 29.00-30.25 baht per dollar. What factors leading the currency will come from external factors Especially the weak dollar AND the monetary policy of Mr. Joe Biden than the president of the United States. Including the epidemic factor of the COVID-19 virus
While the internal factors will come from a current account surplus of approximately $ 18.8 billion. Although slightly outperformed.But compared to capital flows, net inflows for the first 11 months of this year were about Bt3.1 billion, compared to a surplus of $ 20 billion. It represents a capital inflow of up to 600 billion baht, resulting in the appreciation of the baht.
Evaluate the BOT does not use strong drugs
Mr Logic said Caring for the baht value of BOT in the next phase Probably a short-term measure To delay the appreciation of the baht More than a strong anti-drug measure This is because the main factor of appreciation comes from the depreciation of the dollar American. Along with the measures that The Bank of Thailand is underway. The bank estimates that by the end of this year the baht continues to appreciate. But it probably won’t get stronger until it exceeds 30 baht per dollar.
In 2021, the baht should appreciate, reaching 30 baht per dollar. But it will not go beyond the level below 29 baht per dollar
“Right now we are looking forward to taking further action. BOT to exit Both measures to guard the bond market can be issued as a short-term measure. Or push money to invest abroad Because now the outgoing funds do not balance the incoming money, but I do not think that the BOT will issue measures to prevent the inflows of foreign capital. Because the outlook for currency speculation is unclear AND the movement of the baht is consistent with the regional currency. The baht is not the strongest in the region, ”said Mr.
For the trend of the policy interest rate, the BOT is expected to maintain interest rates throughout 2021 at a level of 0.50% per year, since the BOT indicates economic recovery, fragile and uneven. Therefore, focus on corrective measures and on the point Encouraging the distribution of liquidity to be precise and more efficient than using interest rates.
Kasikorn Bank of Thailand tends to reduce the Bank of Thailand regain the era.
While Ms Waranthorn Puthong, Senior Researcher in Economics and Capital Markets Kasikornbank revealed “Prachachat Business” that KASIKORNBANK considers that the image of the Thai economy in 2021 is vulnerable to the weakening of three factors, namely the weak tourism sector and the moratorium on overdue debt. It will result in the business sector lacking the supporting factors of liquidity AND business confidence remains low due to the global outbreak of COVID-19 and political pressures from Thailand on investment confidence. All this should do. The BOT has the possibility to reduce the policy interest rate by 0.25% to 0.25% in the first quarter.
However, the interest cut would not take much pressure off the appreciation of the baht. But you must take into account the factor of economic recovery.
Ms Waranthon said that although the BOT will reduce interest But capital inflows will continue to support the appreciation of the baht due to three factors: the economic recovery trend of China and Asia. And investor confidence after Joe Biden’s victory in the US presidential election, Thai interest rates are higher than those of the major economies. And return money to Thailand due to the need to improve business liquidity
KTB believes that interest will be fixed until 66
Mr. Phacharapot Nantharamas, Senior Director of Krungthai COMPASS Research Center, Krung Thai Bank, revealed that the bank assessed that Thailand’s policy interest will remain low at 0.50% until 2023 or until the economic growth rate (GDP ) go back to 2019, which will be where the BOT may consider a gradual increase in policy interest rates. To gradually store ammo to use in times of need if there is an uncertain situation again Since the economy is at a low point.
However, there are opportunities for policy rate cuts. Because the interest rate of 0.50% is not yet the lowest in the world. There is still a channel to lower interest rates. But the downgrade will be based on two factors: 1. The COVID-19 outbreak. More intensified until the country closed again.
And 2. The appreciation of the baht What many analysts estimate that the dollar will depreciate 10%, which will affect the baht has a chance to appreciate. Until causing a reduction in interest rates
With the view that the direction of the baht is still appreciating This year, the mark is 30 baht per dollar and the year before 2021 it averages 30 baht per dollar. But there is a risk that it will be less than 30 baht per dollar. Partly from the fundamentals And as a consequence of the dollar, which is expected to weaken by more than 10%, although the current account surplus is less than the average of 40 billion to $ 20 billion. Because the income of foreign tourists has disappeared AND foreigners sell stocks and bonds But from a weak dollar AND Thailand is a safe haven, so the trend of the baht continues to strengthen.
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