Baht Tumbles to Lowest Since 2018 as Covid Clouds Growth View

(Bloomberg) -- Thailand’s baht declined to its lowest since 2018 as the spread of the highly transmissible delta coronavirus variant weighs on the economy.

The baht breached last year’s low of 33.187, to reach 33.188, its weakest level since Oct. 31, 2018. The Bank of Thailand kept its benchmark rate unchanged on Wednesday, but cut its growth forecast for the year to 0.7%, two months after lowering it to 1.8%.

“We have been bearish on the baht due to the resurgence in Covid cases not just in Thailand but regionally,” said Charlie Lay, a currency analyst in Singapore at Commerzbank AG. “As long as the delta variant continues to spread, the bias is still down for the baht.”

Thailand’s currency has already fallen 9.8% so far this year, to become the worst performer among major Asian economies, as pandemic and political unrest hit the tourism-dependent economy disproportionately hard. Some analysts are already expecting a rate cut later in the year on the risk that the economy may be headed for a second straight annual contraction.

©2021 Bloomberg L.P.