The baht rose to a six-year high of Bt37.27 against the dollar yesterday despite Bank of Thailand intervention.

The rise was mainly caused by a weakening greenback after the US Federal Reserve earlier this week left a key interest rate unchanged for the first time in two years.

Dealers expect the baht to shoot up to Bt36.50 by year-end.

The baht opened at Bt37.46 to Bt37.50 per dollar yesterday before hitting a peak during intra-day trading at Bt37.27, its highest level since 2000. The currency closed at Bt37.36 to Bt37.39.

Central bank assistant governor Nitaya Pibulratanagit said there was more than US$100 million (Bt3.74 billion) of short and long-term capital inflow yesterday.

She said, however, the bank had yet to verify the objective of these funds and that it would continue to "oversee" the unit in the currency markets.

"The BOT has overseen the baht in the foreign exchange market as needed. Otherwise, it would be much stronger than this," said Nitaya.

The baht was relatively stronger than other regional currencies yesterday.

Nitaya said, however, that the foiled terrorist plot in the United Kingdom had not affected the pound, which weakened slightly.

There was not much capital inflow to the United States either as investors were still concerned about terrorist attacks.

But Nitaya believes that once the euro and yen become weaker and the US dollar stronger in the near future, the baht will finally weaken.

Songpol Chevapanyaroj, head of the treasury products marketing department at Kasikornbank, said the baht had risen in line with the regional currencies against the US dollar.

The baht is expected to be stronger but it is likely to swing from profit-taking from investors, he said.

The unit will be about Bt37.20 to Bt37.80 against the dollar next week, while it may climb to Bt36.50 by the end of the year, he said.

Bank of Ayudhya executive vice president Tak Bunnag said the baht had also been supported by heavy trading volume yesterday, which partly came from the selling of the greenback by exporters.

Besides, foreign investors made a net-buy position in the country's stock market, pushing the baht to become stronger, he said.

"Once the country's political situation is clearer, overseas investors will have higher confidence," he said.

He said he believed that central bank intervention had weakened the baht slightly before the market closed, but that it would strengthen further when trading resumed.

Anoma Srisukkasem,

Somruedi Banchongduang

The Nation