Thailand's currency was expected to maintain its strength for the rest of the year. It was to keep its robust rally, propelled by rising surpluses in the country's current accounts and trade balance. But, these didn't happen.
The Thai baht was the best-performing currency in Asia last year, based on a Reuters survey, rallying by over 7 percent versus the US dollar. All of a sudden, the currency crashed to dead last this month.
Landing even in the middle of the rankings could have been impressive enough for the baht this year, as the central bank and a bunch of other elements are up against the currency.
The baht was on track to leverage off Thailand's enormous current account surplus last year, with growing inflows from tourism sales, and near-record foreign reserves - all this despite minimal domestic economic growth.
The baht's 9 percent advance in the four quarters through December was over 100 percent compared to the currency's closest competitor, the Philippine peso.
Foreign reserves have made the baht the currency of choice for venture capitalists with its "safe haven" appeal for actual market speculation or investment.
The country's current account surplus was over $33.2 billion as of November last year, representing 5.4 percent of Thailand's gross domestic product, the Bangkok Post reported.
Thailand's trade surplus with the US was around $19 billion for 2019 while its GDP growth is predicted to be about 2.7 percent for the current fiscal year.
KBank capital markets research chief Kobsidthi Silpachai expects that the Thai baht will hover around 29.75 against the greenback for the first six months this year, and then rise to 29.25 at the end of the year.
Veerathai Santiprabhob, Bank of Thailand Governor, placed the market on notice during a recent interview that 2020 will be different.
Santiprabhob is looking to rein in the currency by loosening restrictions on foreign-currency deposits, allowing exporters to maintain more of their profits abroad and letting insurance firms to hike their investments overseas.
Falling exports, weak farm prices and a decline in international visitors also pose as risks to economic growth in the next year and a half, Kobsak Pootrakool, secretary of the Council of Economic Ministers, disclosed.
Meanwhile, a growing political divide is seen to hamper inflows of overseas funds, and widely reported plans for British supermarket chain Tesco Plc to sell its Thai business have also put a major dent on the Thai baht.
