Thai inflation hits 2.8% in September, yet Commerzbank warns of continued downside risks for the Baht as supply-side pressures outweigh demand-side strength.
Despite Thailand's September CPI rising to 2.8% year-on-year, Commerzbank analysts maintain a cautious outlook on the currency. While inflation is nearing the upper limit of the Bank of Thailand's target range, the lack of strong demand-side pressure suggests that the currency remains vulnerable to depreciation, as evidenced by the recent move in USD/THB to 33.62.
Thailand's September CPI rose 2.8% year-on-year.
Commerzbank sees elevated downside risks for the Baht despite the recent rise in inflation.
Thailand's headline inflation reached a five-month high of 2.8% in September, nearing the upper limit of the Bank of Thailand's target range. Despite this uptick, Commerzbank analysts maintain a bearish outlook for the Thai Baht, citing persistent supply-side pressures and limited demand-side support.
While inflation is rising, Commerzbank notes that the drivers are primarily supply-side pressures rather than robust demand, leading to a cautious outlook for the currency.