HALISTER1: INSIDE THAILAND: Baht Extends Decline After Dovish BOT Comments

INSIDE THAILAND: Baht Extends Decline After Dovish BOT Comments

(Bloomberg) -- Baht slips with BOT adopting a dovish tone in its forward guidance yesterday.
  • Bank of Thailand “won’t be limited to using only interest rates as a tool” to manage currency volatility, assistant governor Jantarangs said yesterday. Central bank held rates Wednesday
  • USD/THB up 0.1% to 34.957; may test 50-DMA resistance, Bloomberg strategist Andrew Robinson writes
  • BOT may cut rates to 1.25%, for first time since 2010, in coming months, Krystal Tan, Capital Economics, writes in note
    • While Thailand has exited deflation, inflation remains very low at 0.1% y/y in July, and isn’t a barrier to easing
    • Economic growth seen slowing in 2H of 2016
    • Referendum on the new constitution is more likely to inflame rather than soothe political tensions; increase in political uncertainty will undermine investment and confidence, says Tan
  • Overseas investors were net sellers of Thai bonds for first time in 5 days, according to data released Wed by Thai Bond Market Association; also net sellers of Thai shares, after 17 straight days of purchases, according to Stock Exchange data
  • Yield on 3.85% govt bond due Dec. 2025 steady at 2.007%
  • Thailand 5-year credit protection declined yesterday for first time in four days, down 1.6 bps to 93.7 bps, according to CMA New York data
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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BOT TB (Bank of Thailand)

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Krystal Tan (Capital Economics Asia Pte Ltd)

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