The baht strengthened Monday, snapping a two-day slide, as the governor of the Bank of Thailand (BoT) said steps to slow the currency's gains were not discussed at a meeting with government officials.
Central bank governor Prasarn Trairatvorakul, Bank of Thailand monetary policy committee members and representatives of the government and private sector were at the meeting Monday.
Finance Minister Kittiratt Na-Ranong, who has repeatedly called for a cut in borrowing costs to stem fund inflows, attended as well.
BoT governor Prasarn said the central bank's rate-setting committee will meet on May 29 as scheduled, ruling out a special session.
No one put pressure on the central bank to move on the policy rate at the meeting, he told reporters in Bangkok. (continued below)
Finance Minister Kittiratt Na-Ranong, right, at a meeting with the Monetary Policy Committee members, including Bank of Thailand governor Prasarn Trairatvorakul, left, and permanent secretary for finance Areepong Bhoocha-oom, centre, at Government House on Monday. (Photo by Apichart Jinakul)
The baht reached a 16-year high last month as monetary easing in developed nations increased the flow of funds to emerging markets.
"Concerns that they will announce something from today's meeting, which has put downward pressure on the baht since late last week, eased just for now, helping it rebound," said Toyomu Chihaya, assistant general manager of the Bangkok treasury department at Mizuho Corporate Bank Ltd.
"It doesn't mean the baht will continue to advance from here. There remains some concern about measures to stem the appreciation."
The currency climbed 0.3 per cent to 29.68 per US dollar as of 1.54pm in Bangkok. It had slipped 1.4 per cent in the two days through May 10, according to data compiled by Bloomberg.
The baht touched a two-month low of 29.85 earlier.
The baht is still up 3 per cent this year, making it the best performer among Asia's 11 most-traded currencies. It reached 28.56 on April 22 and April 19, the strongest level since July 1997, the start of a recession.
One-month implied volatility, a measure of expected moves in the exchange rate used to price options, slumped 13 basis points, or 0.13 percentage point, to 6.31 per cent.
Narongchai Akrasanee, a member of the monetary policy committee, said on Monday taht four measures proposed to help stem capital inflows are sufficient. Finance Minister Kittiratt said the measures should be considered "carefully" and that lowering the key rate is just one option.
Thailand's benchmark interest rate of 2.75 per cent compares with a maximum of 0.25 per cent in the US and 0.1 per cent in Japan. It is lower than Indonesia's 5.75 per cent, the Philippines' 3.5 per cent and Malaysia's 3 per cent.
The yield on the 3.625 per cent government bonds due June 2023 rose two basis points to 3.36 per cent, data compiled by Bloomberg show. The rate reached 3.33 per cent on May 10, the lowest level since February 2012.