Analysis of movements in Thailand Baht.

Abstract

This applied research project analyses the movements in the baht/US$ bilateral exchange rate. This study examines the various factors which determine movements in the value of the baht. The Thai baht is closely monitored by the Bank of Thailand (BOT) which follos a strict regime of pegging its currency to a basket of currencies. This study also examines the BOT's various monetary and fiscal policies in trying to achieve economics growth and stability in Thailand. Exchange rate determination models, such as the PPP theory, are also analysed. Empirical evidence is collected to support or to refute thes theories. The study tracks the movements of a few economic variables related to the exchange rate determination, in order to gauge their impact on value of the baht.