UTCC expects policy rate cut

Investors have a confidence that the monetary policy committee will cut the repurchase rate at its extraordinary meeting later this afternoon, an academic at the Assumption University said.

Thanavath Phonwichai, vice rector for research at the university, said on Tuesday that he  thought that the panel had only two options  — to cut the policy rate today, or just to discuss the rising baht to create a positive psychological effect.

However, most investors believed that the RP rate would be immediately reduced today, otherwise the extraordinary meeting would not have been called, he added.

The regular meeting of the central bank’s monetary policy committee is scheduled for May 29.

Mr Thanavath said if the first option is chosen, it is likely that the policy rate would be cut by 0.25 percentage points, from the current 2.75% to 2.70%. This would show the Banlk of Thailand was being active in curbing the currency.

If the central bank committee opts not to reduce the rate and only discuss the currency situation, it would show that the committee was worried about the strength of baht and that too would have a positive psychological effect on the money market.

Kanchana Chokepaisalsilp, manager of macro-economic department at Kasikornbank, said on Tuesday that the baht moved to nearly 29.30 baht to the US dollar this morning.

Ms Kanchana said the market is keeping a close watch for signals the baht could be reined in

Related search: monetary policy, baht, thailand, extraordinary meeting, Bank of Thailand

About the author

Writer: Online Reporters
Position: Online Reporters