Inflows recede after Fed minutes released

Inflows recede after Fed minutes released

Foreign investors have been buying fewer Thai bonds and continued to sell Thai shares after the US Federal Reserve last week signalled last week it may wind up the bond purchase programme.

Between Jan 1 and last Friday, foreign investors bought 90 billion baht worth of Thai bonds, two-thirds of which were short-term bonds, said Niwat Kanjanaphoomin, president of the Thai Bond Market Association.

He said foreign net inflows declined sharply from 15-20 billion baht a day during the first six weeks of this year to about 10 billion last week.

The retreat followed the Fed's minutes last week indicating a disagreement on whether the monthly bond purchase of about US$85 billion should be trimmed before unemployment and inflation improve to a satisfactory level.

"Funds will flow out once the US economy shows solid improvement. Therefore, we should keep monitoring the US data. In the short term, they keep coming but in declining volumes," said Mr Niwat.

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