Thailand’s bond market is showing growing pessimism over the economy’s recovery from the first recession since 2009, as signs the US will maintain stimulus bolsters global demand for the nation’s sovereign debt.
The 10-year yield declined four times as fast as that of two-year notes since the end of August, narrowing the relative yield gap by 30 basis points to 103, according to data compiled by Bloomberg. The difference reached 97 on Oct 4, the least since July 23. The spread shrank nine basis points to 71 in Malaysia, while it widened in Indonesia and the Philippines.
Finance Minister Kittiratt Na-Ranong said in an interview this month that borrowing costs of 2.5 per cent are too high, as a government stimulus plan awaits approval in parliament. The central bank lowered interest rates in May for the third time since January last year, amid the lowest inflation among Southeast Asia’s biggest economies.
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