Thailand’s economy is still on track for its projected economic outlook despite being surprised by the election of new US President Donald Trump. Markets across the globe were shaken by one of the most watched election in history. When Trump won over Clinton, the market was sent in a frenzy of volatility that left traders cautious and investors afraid.
Over in Thailand, the market experienced the same. Trump’s win has caused fund to go out of the country. Despite extreme movements, a senior Finance Ministry official says that Thailand is only affected in the short-term. Furthermore, it won’t affect the economy’s long-term plans and positive economic outlook.
It has been a difficult month for Thailand with the recent death of their revered king whom they used to look up to in times of national turmoil and uncertainty such as this.
Warotai Kosolpisitkul, a Fiscal Policy Office director-general in the Finance Ministry, said that they had anticipated the outflow of foreign funds. They saw that traders and investors would be fleeing towards safe assets after the Republican nominee Donald Trump triumphed over Democrat representative Hillary Clinton. Right from the onset of the election last Wednesday, as the world watched Trump take the lead, safe havens such as gold and the Swiss franc have surged to record highs. The baht understandably weakened versus the dollar because of this.
Gold prices were changed 19 times until 3:36 pm during election day according to the Gold Traders Association. Buying prices were at 21,011.76 baht per baht-weight for gold ornaments and 21,400 baht per baht-weight for gold bar while selling prices were at 22,000 baht per baht-weight for gold ornaments and 21,500 baht per baht-weight for gold bar.
The Stock Exchange of Thailand declined as much as 1.6% in intraday trading when Trump was just ahead of Clinton. It closed down 0.03%.
With all the volatility, Warotai said he remained confident that the Thai markets will be able to handle such rapid chages. He attributes his assurance to the country’s high foreign reserves and stable economic fundamentals. He said that the long-term economic prospect will be unchanged for Thailand.
ETX Capital analyst Neil Wilson had something to say about the volatility, “We have seen the market reaction be nowhere near as bad as it might have been — we could yet see a big pullback. Just like Brexit the longer term implications of this vote are much harder to discern and forcing investors to take stock. “For now markets look like they are in limbo, maybe waiting for the US open for direction.”