As a result, inflation has skyrocketed all over the world. Led by big brother, the US inflation is the highest in 41 years, while the euro zone inflation has increased continuously for more than a year, moving forward to make new highs. Meanwhile, Thailand’s latest inflation figure in June rose 7.66%, the highest in 13 years.
Rising inflation has become a key factor for central banks to accelerate interest rates. This year, the US Federal Reserve has continued to raise interest rates. And there are plans to come up again at every meeting for the rest of this year. The target is for year-end interest rates to be 3.4% from the current 1.50-1.75% level.
When the US interest rate door is opened Money from all over the world immediately poured in. Resulting in a strong dollar! On the contrary, the baht depreciated the most in 6 years, surpassing 36 baht per dollar already. from the interest rate difference between the US and Thailand that is getting further and further away After the Bank of Thailand (BOT) kept the interest rate at 0.5%, hoping to help support the economy.
This year, the baht has depreciated more than 8% from the 2021 closing level of 33.25 baht per dollar. and there is still a chance to depreciate If the National Bank has not raised interest rates or a new wave of turmoil occurs in the country which will directly affect the tourism sector pushing money out
Of course, when the baht depreciates, there will be both profitable and disadvantaged sides. “Importer” will be fully affected from the depreciation of the baht because more baht is needed to import products
part “Exporter” that accepts money in dollars When exchanging back to Thai baht, you will get a larger amount. At the same time, when the baht depreciates, Thai exports become cheaper in the eyes of trading partners.
in addition The depreciation of the baht also had a positive effect on the tourism sector. because when tourists come to Thailand Bring more foreign currency to exchange into baht. while various products looks decreasing in value
so Stocks that will benefit from the weak Thai baht have an export group including electronic components, food, agricultural products, as well as tourism stocks and hospital groups.
However, if the baht depreciates until it breaks through the level of 36.40 baht per dollar This will make the baht the weakest in 16 years, with most traders estimating that the movement of the baht around the baht has a large resistance at 36.50 baht.
And there is a chance that the baht will weaken throughout the 3rd quarter before turning back to appreciate at the end of the year. following the recovery of the Thai economy after the country was fully opened
byNomura Securities Pattanasin It states that if going back to the start of the COVID-19 epidemic at the end of 2019, the baht depreciated the second most in the region, -13.06%, after the yen, which weakened -18.19 percent. Slow recovery and monetary policy against the west
Meanwhile, Thailand’s inflation was at a rather high level of 7.66%, while the policy interest rate was kept at a low 0.5% level, although at the latest meeting the resolution was a 4-to-3 unanimous decision and signaled more Hawkish. 3 people support the policy interest rate hike
The research department expects the MPC to raise the policy rate in the remaining three meetings of this year, 0.25% each time. As a result, the year-end interest rate is at 1.25%, but it is still lower than expected rate hikes in developed countries.
The depreciation of the baht is a positive factor for export stocks. Recommend GFPT with a target price of 20 baht, CPF with a target price of 28 baht, SAPPE with a target price of 43 baht, MEGA with a target price of 65 baht, ASIAN with a target price of 21.60 baht and KCE with a target price of 80 baht. I think these stocks are likely to outperform against inflation.