DAVOS, SWITZERLAND - Finance Minister Kittiratt Na-Ranong says Asian nations including the baht should prepare for their currencies to appreciate.
"We have to prepare for the baht and other currencies to be stronger against the dollar," he said in an interview on Friday at the World Economic Forum's annual meeting in Davos.
The baht has appreciated by about 1.1% against the US dollar since the start of this year, though it eased back to 29.90 on Friday. It gained 3.1% in 2012 and 5% in 2011.
In recent weeks, Japan's aggressive efforts to weaken the yen to revive exports and the economy have added a new dimension to the currency challenge.
Most Asian currencies fell this week by the most since July as a slide in the yen fanned concern that regional central banks would intervene to prevent exchange-rate gains that may hurt exports.
Officials from Russia to Thailand have voiced concern that Japan's intention to weaken the yen could stoke competitive devaluations. The Bloomberg-JPMorgan Asia Dollar Index retreated from a 16-month high as the yen dropped for an 11th week.
The baht completed its biggest weekly loss since June amid concern that its appreciation to a 17-month high would hurt exports. Mr Kittiratt said on Thursday he would like to see the baht a little bit weaker as appreciation was putting pressure on exporters.
"The authorities are getting more uncomfortable with sharp appreciation against the dollar and the yen," said Wee-Khoon Chong, a strategist in Hong Kong at Societe Generale.
The uncertainty surrounding global growth, currency gains and the risk of intervention are prompting retreats in regional currencies, he said.
The Asia Dollar Index, which tracks the regions 10 most- active currencies excluding the yen, fell 0.6 points this week after touching 118.89 on Jan 18, the highest level since September 2011.
The baht ended a seven-week rally, the South Korean won slumped by the most since May and Malaysia's ringgit had its worst week since June.
South Korean authorities have sold the won this month and Taiwan's central bank did the same on most days in the past nine months, according to traders.
The Philippines' record-high foreign-exchange reserves show the extent of central bank intervention, central bank deputy governor Diwa Guinigundo said on Jan 15.
Malaysia's ringgit slipped 1.2% to 3.0490 per dollar for the week amid concern that investors will sell local stocks as a general election approaches.
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Article source: http://www.thethailandlinks.com/2013/01/27/kittiratt-expect-asian-currency-gains/
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