The Thai baht is likely to appreciate to 38 to the U.S. dollar in the first quarter of this year because investors in the United States have shifted funds to invest in stock markets in Asia and weighed more investment in Thailand, according to a veteran banker.

According to the Bangkok Bank, Wednesday's baht against U.S. dollar is 39.51/40.11.

Prasong Uthaisaengchai, Senior Executive Vice President of Bangkok Bank, was quoted by the Thai News Agency as saying Wednesday that the U.S. investors had sold dollars heavily and brought the money to invest in stock markets with more attractive returns since the U.S. Federal Reserve signaled an end to its interest hikes following continued upward adjustment for up to 18 times.

Most investors have paid much attention to investing in Asian stock markets, resulting in all regional currencies, including the Thai baht, strengthening.

He said the Thai currency had rapidly appreciated since early this year because foreign investors brought a lot of funds to invest in the Stock Exchange of Thailand (SET).

They viewed stock prices in Thailand are lower than those in other Asian markets.

The price/earning (p/e) ratio of the SET now stays at 8-9 times, while a p/e ratio of stock markets in neighboring countries average 13-14 times.

"The baht is very likely to strengthen to 38 to the U.S. dollar in the first quarter of this year because the currency has rapidly appreciated since early this year. The baht used to appreciate to that level in the past," he said.

Source: Xinhua