Thailand’s central bank has found it tough to stop surging Thai Baht.
On Friday, Thai currency advanced as much as 0.3% reaching the closed exchange value of 30.187 per dollar, the strongest level since end of May 2013. By gaining to 7.8% this year, Thai Baht is valued more than any of its emerging-market peers except Russians.
The gains make Thai authorities now fear that Baht’s strength is becoming a drag on Thai economy so the central bank should take a cautious care of the currency. The question is that why is Thai Baht so strong?
The answer may be as follows:
Several factors are attracting foreign investors in to Thailand, making it a haven for foreign investment such as:
1. Healthy current account which according to analysts at Goldman Sachs Group Inc.
2. On the other hand, the International Monetary Fund forecasts the country will post a surplus of 6% of gross domestic product this year, almost a double of Japan’s.
3. Thailand’s reserves and negligible inflation also provide comfort to the investors.
4. The central bank’s foreign-cash pile stands at $220 billion, the equivalent of more than 12 months of Thai imports.
5. Inflation which currently has been running under 0.3% which is below the central bank’s target of 1% to 4%.
6. Thailand is getting a boost from gold. A hub for bullion trading,
7. Thailand has benefited as jitters about the U.S.-China trade war and global economic slowdown have driven a 17% gain in the price of the metal this year.
Obtaining an Foreign Business License in Thailand usually takes 60 days from the date the application is submitted