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Thai Baht Update


jon46
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(Bloomberg) -- The baht erased losses as the central bank kept the benchmark interest rate unchanged even after Singapore surprised markets earlier in the day by easing monetary policy.

 

 

 

The currency traded unchanged from yesterday at 32.550 a dollar as of 4:28 p.m. in Bangkok, according to data compiled by Bloomberg. It was down as much as 0.3 percent at 32.651 before the rate announcement.

 

 

 

 

Sixteen of 22 economists surveyed by Bloomberg had predicted the decision while the rest forecast a cut from 2 percent to 1.75 percent. Speculation mounted in early trade that Thailand would follow the Monetary Authority of Singapore in joining central banks around the world, including the European Central Bank, Canada, Denmark and India, in loosening policy amid slowing economic growth and deflation risks.

 

 

 

 

 

 

“Some investors who sold the baht on speculation Thailand would follow MAS in a surprise easing probably bought back the currency after the rate decision,†said Kozo Hasegawa, a foreign-exchange trader at Sumitomo Mitsui Banking Corp. in Bangkok. Those that expected a cut probably closed those positions, he said.

 

 

 

 

Bank of Thailand committee members agreed that monetary policy should remain accommodative to support an economic recovery, Mathee Supapongse, assistant governor at the central bank, said at media briefing in Bangkok Wednesday. The benchmark rate isn’t the major factor affecting capital flows and policy makers will use other measures to manage them, he said.

 

 

 

 

Finance Minister Sommai Phasee last week said the monetary authority should “in theory†lower borrowing costs, and that exports are under pressure from a stronger baht. The currency climbed to 32.48 a dollar earlier Wednesday, the highest level since Oct. 31.

 

Inflation Target

 

The Bank of Thailand, which has kept its rate unchanged since cutting it in March, has lowered 2015 forecasts for economic growth and exports because the recovery is hampered by the weaker outlook for domestic consumption and global demand. Inflation eased to 0.6 percent in December from a year earlier, the least in Southeast Asia and the lowest since 2009.

 

 

 

 

The risk of inflation breaching the lower end of the Bank of Thailand’s target range of 1 percent to 4 percent this year has increased, Supapongse said.

 

 

 

 

Government bonds fell, with the yield on notes due in 2025 rising four basis points, or 0.04 percentage point, to 2.62 percent, according to data compiled by Bloomberg.

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World wide currency wars...

The Thai CB is supporting the Baht it seems given most other currency have weakened considerably against the $ which seems

the best of a crooked bunch of fiat currencies. IMHO the dollar will eventually get taken to the whipping shed like the Swiss Franc...

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