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<\/p>\nThailand also chose to participate\u00a0in the currency war. The policy of the Central Bank of Thailand made thai baht drop, while the country struggles to regain the path of growth.<\/p>\n
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The movement is quite spectacular: the Thai baht lost\u00a02.9% in just three weeks, bringing the currency to its lowest level against the dollar in almost six years<\/strong>. The trend is particularly striking at the same time, the dollar has lost its luster since the publication of a disappointing first-quarter growth number in the US.<\/p>\n The baht has not followed the movement. The Thai Central Bank (BOT) came into\u00a0the currency war. It\u00a0took the market by surprise at this end of April by lowering its key rate to 1.5%<\/strong>, its lowest level since July 2010. It\u00a0already had \u00a0cut rates a month earlier. At the same time, the central bank announced an easing of exchange controls, including allowing Thais to freely buy foreign currency in the limit of 5 million, against 500,000 before. The absence of inflation (- 1% in April) and the falling price of oil also leaved considerable room to cut rates in a deflationary environment.<\/p>\n BOT’s announcements\u00a0have already led to significant capital outflows, which also affected the currency. According to Bloomberg, foreign investors sold, for $ 112 million net in the equity markets and withdrew 786 million of commercial paper from the lower rates.<\/p>\n The monetary authorities have heard the concerns of exporters – weighing more than 66% of economic growth – against a currency considered to be too strong. “The decline of the Thai currency will favor exporters and reduce deflationary pressures,”<\/em> admits a Rakuten Securities analyst interviewed by Bloomberg. “The central bank is clearly in favor of a weaker baht.” <\/em><\/strong><\/p>\n Especially as the country experienced last year a real stop to its growth with an increase of only 0.7% of its GDP. 2015 promises to be better, thanks to tourism, but the government has already revised several times its growth forecast to 3.7% (against 4.1% earlier this year) and the Office of National Economy and Social Development no longer table on growth of between 3 and 4%.<\/p>\n In the first quarter, growth has indeed been only 3%. Because of\u00a0falling exports, weak consumer spending and declining agricultural prices (rice, sugar, rubber …). In this context, the SET index of the Bangkok stock exchange has lost 6.5% since its peak in 2015.<\/p>\n