Thailand's three-year government bond yield was near a two-year low after international investors added holdings amid speculation the central bank will keep borrowing costs low this year. The baht held steady.
Global funds bought US$133 million more sovereign notes than they sold in the first two days of this week, while cutting holdings of local stocks by a net $150 million, data from the Thai Bond Market Association and stock exchange show. Inflation slowed to 3.32% in October from 3.38% the previous month, according to a Nov 1 official report. The Bank of Thailand, which cut its benchmark interest rate by a quarter percentage point to 2.75% on Oct. 17, next reviews monetary policy on Nov 28 .
"Thai bonds are supported by fund inflows from overseas as inflation was lower than expected and rates are expected to stay low," said Wee-Khoon Chong, a strategist at Societe Generale SA in Hong Kong. "Also, there’s a possible asset allocation shift out of Thai equities into bonds."
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