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Buy Indian Rupee Against Thai Baht, Brown Brothers Advises

By Lilian Karunungan Dec. 11 (Bloomberg) — Investors should buy the Indian rupee versus the Thai baht to profit from the South Asian nation’s faster economic growth and higher interest rates, according to Brown Brothers Harriman & Co.

The baht is “expected to weaken from a combination of weak growth, low interest rates and continued political uncertainty,” analysts led by New York-based Marc Chandler said in a research note dated yesterday. “The rupee should benefit from high interest rates relative to Thailand and a very strong economic outlook in India, which suggests Indian rates will go up in the first or second quarter of 2010.”

The U.S. bank suggested buying the rupee at 1.4095 baht, forecasting the currency will strengthen to 1.35 baht, its highest level since November 2008. It did not give a timeframe for the move.

The Bank of Thailand’s one-day bond repurchase rate is at 1.25 percent, while the Reserve Bank of India’s reverse repurchase rate is at 3.25 percent.

To contact the reporters on this story: Lilian Karunungan in Singapore at at lkarunungan@bloomberg.net.

Source: http://www.bloomberg.com/apps/news?pid=20601091&sid=aTp4glN5wuFQ

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