THB underperforms regional peers due to $379m net foreign portfolio outflows in June, driven by low yields and BoT’s growth-focused policy.
The Thai baht has weakened against the US dollar, underperforming other regional currencies as rising US yields trigger net foreign portfolio outflows. June saw $379 million in net outflows, reversing $680 million in net inflows from May, despite lower oil prices easing terms-of-trade pressures.
The Bank of Thailand’s growth-focused monetary policy stance limits tightening scope, reducing the baht’s yield appeal. Analysts note the currency’s decoupling from oil price trends, with depreciation pressures reinforced by its low-yield profile and shifting investor sentiment.
The baht’s underperformance reflects broader challenges as global yield differentials drive capital flows away from emerging markets with limited policy flexibility.