The Public Debt Management Office (PDMO) plans to reassess the potential impact of US President Donald Trump's tariff policy on fundraising costs.
According to Jindarat Viriyataveekul, public debt advisor at PDMO, the full impact of the tariff hikes has not yet materialised.
The current effects are from market anticipation and weakening investor confidence, she said.
However, the yield curve for US medium- to long-term bonds has risen, as investors gradually sell off US government bonds in those maturities based on a lack of confidence in the long-term US economic outlook, amid concerns that the stringent tariff policy will lead to stagflation.
As a result, the US government faces higher borrowing costs, and the private sector in America also expects a spike in lending costs.
The impact on Thai government bonds has been relatively minimal as Thailand was granted a tariff hike suspension, said Ms Jindarat. Moreover, the recent weakening of the US dollar, stemming from expectations of higher inflation, has led to a slight increase of capital inflows into Thailand's government bond market.
She said the trade war remains highly volatile, making it necessary to monitor developments. The financial impact of the tariffs cannot be fully assessed yet, said Ms Jindarat.
"Government debt is unlikely to be affected because most of the debt stocks are fixed," she said.
"However, the private sector may feel the pinch if banks remain cautious about lending and issuing corporate bonds, as investors may be risk-averse."