THB: Second Surprise Cut By BoT
§ The
BoT cut its one-day repurchase rate by 25bp to 1.50% at its 29 Apr meeting.
Once again, the decision to cut was not unanimous but by a vote of 5-to-2 with
the latter two members voting to keep the rate at 1.75%. The rate cut comes in
the wake of the Finance Minister’s urging on 16 Apr for the central bank to do
more to help the economy.
§ The
weak exports so far probably tipped the policymakers’ hands, especially after
both the Commerce Ministry and the Finance Ministry cut their export forecast
for 2015. At the same time, the growth outlook was also downgraded by the
Finance Minister. In addition, the benign inflationary environment was also
conducive to a rate cut.
§ The
rate cut provided the USD/THB with a leg up with the pair now sighted around
the 32.800-region. Given this market development, we are now revising our
USD/THB to end 2Q15 at 33.000 and 3Q at 33.20. Going into 4Q, US growth should
become more entrenched and should be supportive of Thai export and tourism
sectors, and this should push the USD/THB lower to 33.10 by year-end.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.