Thailand and Singapore sent signals of concern Thursday about the rising value of their currencies against US dollar, in the latest indication of how fluctuating foreign-exchange markets are pressuring Asian nations.
Thailand's Prime Minister on Thursday ordered the central bank to keep a close eye on the baht and "prepare measures" after the currency soared to a 29-month high against the US dollar, the finance minister said. It has the strongest performing currency in Asia behind the Japanese yen and Malaysian ringgit.
In Singapore, a person familiar with the matter said the central bank is poised to intervene in the currency market if the Singapore dollar approaches its record high again. The U.S. dollar traded near its lowest point of the year against the Singapore dollar Thursday before regaining some of its losses. For the year, the U.S. dollar is down about 4.2% against the Singapore dollar.
Against other South East Asian currencies, the U.S. dollar year-to-date has fallen 8.7% against Malaysia's ringgit, 4.4% against Indonesia's rupiah and 3.4% against the Philippine peso.
Authorities worry that a quick rise in its currency can be destabilizing. A stronger currency can also make a country's exports less competitive in other markets
Thailand Watching Baht's Strength [The Wall Street Journal, 2 September 2010]
Abhisit orders BoT to monitor soaring baht [Bangkok Post, 3 September 2010]