EIC sees baht continuing to face appreciation pressures, revising its 2020 year-end forecast downward to 29.5-30.5 baht per USD
The EIC sees the baht continuing to face appreciation pressures in 2020, but to a smaller degree than in 2019
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The EIC sees the baht continuing to face appreciation pressures in 2020, but to a smaller degree than in 2019. The EIC feels that the baht at the end of 2020 will prevail within a range of 29.5-30.5 baht per USD as Thailand is still facing strutural challenges causing the current account surplus to remain high. Meanwhile, demand for outward investment is still low due to a high degree of home-bias and thus considerable demand for the baht relative to USD. The US dollar index is also expected to weaken slightly, prompting the baht to strengthen.
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However, other factors leading to a slower pace of baht appreciation compared to 2019 include an improvement in outward invesment by Thai corporates, a likely decline in the selling of gold to realize profits, and a Thai – US interest rate gap that could possibly widen.