Ahead of Bank of Thailand’s (BOT) benchmark policy rate announcement on Wednesday Thai baht weekend to THB 33.760/USD edging up by 0.250. Widely believed BOT is expected to keep benchmark rate at 0.5%.
Benchmark rate is less likely to be slashed down since government’s fiscal policy is expected to be favorable to support economic recovery. The cabinet earlier today approved 1.34 trillion baht ($39.7 billion) new borrowings for fiscal year 2022 which is to start from October 1.
The Thai public debt to GDP will be increased to 62.69% by the end of September 2022.
Rising energy prices and US bond yield added to the weakening of the currency pair USD/THB. Majority of Asian nations being net importer of energy saw volatile currency movements.
The benchmark 10-year US bond yield rose five basis points to 1.54% which is three months high. Pressure on the yield added as rising energy prices and bottlenecked supply chain expected to put higher inflationary pressure.
Global fund managers are recessing risk in global equity amid rising yield puts lower valuation of equity on books.
The dollar index posted gained against its 10 peers inching up 0.274% trading at 93.634.