Thai baht gains most in 5 weeks as opposition parties lead vote

Manila – The Thai baht advanced to the highest in more than five weeks after opposition parties, which have promoted pro-growth policies, emerged as the biggest winners in the polls.

The baht climbed 0.9 per cent to 33.70 per US dollar on Monday, the highest since April 5, before paring slightly its gain to 0.8 per cent. Against the Singapore currency, it rallied 0.65 per cent to 25.2171 per Singdollar as at 5.03pm.

But Thailand’s benchmark SET stock index fell as much as 1.3 per cent amid uncertainty over the composition of a new government. The country’s two main opposition parties agreed on Monday to form a ruling coalition after they trounced in a weekend election military-backed rivals that have controlled government for nearly a decade.

The Move Forward Party and opposition heavyweight Pheu Thai dominated Sunday’s ballot in a stunning rout of army-backed parties, but they could face challenges in mustering enough support, with parliamentary rules drafted by the military after a 2014 coup skewed in favour of its allies.

The baht is up 2.6 per cent this year, and is the second-best performer in Asia. But analysts said any gains in the local currency due to poll results are premature.

Mr Alvin Tan, head of Asia forex strategy at RBC Capital Markets, said: “Any THB gains on the election results are premature. A coalition government is still required. As such, the full outcome is unlikely to be known for weeks.”

The baht did get a further boost on Monday after economic growth data beat estimates in the last quarter. Thailand’s gross domestic product rose 2.7 per cent in the January to March period from a year ago, faster than the median 2.3 per cent expansion estimated by economists in a Bloomberg survey. BLOOMBERG