HONG KONG: The Thai baht rose against the dollar on Friday to 32.50 from 32.54 on Thursday, with traders saying that the junta currently ruling Thailand has brought a semblance of stability over the short term.
The baht was trading at 32.40 prior to the coup, and was trading as high 32.46 per dollar at intraday on Friday.
Mark Williams, chief Asia economist at Capital Economics, said the latest events could help the country in the short term.
“The coup reduces uncertainty about the immediate outlook and, in particular, the possibility that the political standoff would turn much more violent,” he said.
“For these reasons it could actually be positive both for Thailand’s economy and financial markets in the near term,” Williams added.
Concerns about the effect of the junta on the economy were highlighted as Toyota and Honda, which said they had been forced to close their factories in the country in order to comply with the curfew.
On Friday, military leaders summoned more than 100 prominent figures from rival political camps, including “Red Shirt” leaders, former police and military officers and politicians from the opposing parties.
Although the economy shrank for the first time in two years in January-March, analysts say it has been largely immune to shocks — the nation has long been nicknamed “Teflon Thailand” for its record of resilience in the face of political upheaval. While the stock market was down for the day, it is still up more than 6.0 percent for 2014.
“The rubric goes that one should buy any market when there is blood on the streets, but that suggestion arose because blood on the streets historically caused the market in question to dip to levels that were too cheap to ignore,” Sally Macdonald, head of Asian equities at Marlborough Fund Managers in London, was quoted by Bloomberg in an outlook on the Thai currency. “That cannot be said of the Thai market at present.”
Bloomberg said the baht may weaken by 1.4 percent to 33 per dollar “in the next couple of sessions,” said Frances Cheung, head of Asian rates strategy at Credit Agricole in Hong Kong.
THE TIMES WITH REPORTS FROM AFP, BLOOMBERG