BANGKOK, March 20 (Xinhua) -- The value of the Thai baht has reached its highest level against the U.S. dollar since the currency was floated in July 1997, stirring market concerns over its consequences on export and private sectors.
The baht on Tuesday ended at 29.32/35 to the U.S. dollar, a level unseen over the past 16 years. It has appreciated by almost 4 percent since the beginning of this year, the fastest among Asian currencies.
Bank of Thailand Governor Prasarn Trairatvorakul said the strengthening of the baht reflects foreign investors' confidence in Thai economy. Positive factors include the recent upgrade of Thailand's credit rating by Fitch Ratings to BBB+, a 19-month high in consumer confidence and possible increase in the central bank's projection for economic growth in 2013.
Thiti Tantikulanan, the head of capital markets at Kasikornbank, predicted that the baht could retain its upward trend, as capital flows largely to the equity and bond markets.
Foreign holding in local bonds now stands at 800 billion baht, the highest since the Thai Bond Market Association's founding in 1994.
The support level for the baht this year is tipped at 29, he said.
The private sectors have been stepping up pressure on the central bank to ease the baht's strength and cope with foreign capital inflows. But the central bank insisted that it would monitor the baht's trend for a while before deciding if any intervention should be taken.