BENGALURU: Most Asian currencies and stocks were on the front foot on Monday, with markets in Thailand taking centre stage after the election of a new prime minister and as the nation’s economic growth beat expectations.
The Thai baht rose as much as 0.5%, hitting its highest since early January, while stocks rallied nearly 1.2%.
The tourism-reliant economy posted 2.3% growth in the second-quarter, data released earlier in the day showed, beating a Reuters poll of analysts’ expectations for an expansion of 2.1%.
On Friday, Paetongtarn Shinawatra was elected Thailand’s youngest prime minister, calming political uncertainty that had dogged Southeast Asia’s second-largest economy after former Prime Minister Sretta Thavisin was dismissed on grounds of ethic violations.
However, politics in Thailand remain a risk to the economy, some analysts caution.
“I think the new PM did ease some concerns over the political uncertainty which could be quite positive for Thai assets in the near term. However, I think it would be more important to focus on how quickly the new cabinet will be formed,” Krung Thai Bank’s markets strategist Poon Panichpibool said.
“Thailand clearly has still not found a formula to bridge its deep political divide. Without one, uncertainty will remain entrenched and economic populism is likely to become worse, with negative repercussions for investor confidence,” analysts from Capital Economics wrote.
Elsewhere, the Malaysian currency traded as much as 1.3% higher at 4.370 per dollar, reaching a one-and-a-half year peak, while the South Korean won surged 1.4% to its highest since late March.
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