The Thai baht has flipped from Asia's strongest forex in 2019 to one of many area's worst performing this yr, following an outbreak of a brand new
The Thai baht has flipped from Asia’s strongest forex in 2019 to one of many area’s worst performing this yr, following an outbreak of a brand new coronavirus that originated from China.
The Thai forex has misplaced round 4.1% towards the U.S. dollar thus far this yr, reversing virtually half of its 7.9% good points towards the buck in 2019.
In a bid to spice up the Thai financial system, the nation’s central financial institution, the Financial institution of Thailand, on Wednesday unexpectedly cut its policy rate to an all-time low, and cited the virus unfold as one motive that can drag down progress.
Trinh Nguyen, senior economist at French funding financial institution Natixis, mentioned on Thursday the second-largest financial system in Southeast Asia has been too depending on exterior demand,” notably that from China.
Nguyen informed CNBC’s “Squawk Box Asia” that tourism income from China accounts for round 2.7% of Thailand’s gross home product, whereas exports to China make up some 6% of the nation’s GDP.
“We all know with absolute certainty that the tourism hit shall be there,” she mentioned, including that exports are additionally prone to be “one other downward drag” on Thailand’s roughly $500 billion financial system.
“That is why we slashed GDP forecast to solely 2.2% this yr and that implies that Thailand could be very wanting the World Financial institution goal of 5% if it desires to succeed in excessive earnings standing in a few decade,” mentioned Nguyen.
The unfold of…