Thailand’s SET Index closed at 1,383.93 points, decreased 0.15 points or 0.01% with a trading value of 41.2 billion baht. The analyst stated that the Thai stock market traded narrowly following the larger-than-expected economic figures from the US, strengthening the US dollar. The rise of bond yields also put some pressure on Asian currencies, which caused foreign investors to slow down their investment.
The analyst expected the market to trade narrowly tomorrow, while investors paid attention to the meeting of the cabinet and the monetary policy committee regarding the progress of the digital wallet scheme, as well as international factors, including the conflict in the Middle East and inflation numbers from China coming this week.
The Bank of Thailand is expected to keep its key interest rate unchanged at the meeting this week and could leave it there until early 2025.
Thailand’s Prime Minister Srettha Thavisin has been repeatedly said that the Thai economy is in a “crisis” situation and urged the Bank of Thailand to cut interest rates as inflation has now been lower than the central bank’s target range of 1-3% for the ninth consecutive months, including the inflation in January inflation data this Monday.
However, the Bank of Thailand Governor Sethaput Suthiwartnarueput begs to differ with the PM statement, saying that Thailand is not in a crisis and the benchmark rate is at a neutral level that the central bank may not see a change in policy rates anytime soon.
Thailand’s headline consumer price index (CPI) in January dropped more than expected to its lowest level in 35 months. Still, it is expected that the price will return to the central bank’s target range in the second quarter of this year.
Despite the consensus, some economists expected that the market could see an earlier rate cut than anticipated if the outturn for GDP disappoints. In this case, the cut could be as soon as the final quarter of this year.
Oil prices fell sharply last week despite OPEC+ agreement to maintain production cuts in 2024, losing around 7% last week following the announcement by the US Federal Reserve on the policy rates.
The fall accelerated on Wednesday after the Fed held interest rates firm at the meeting in January and said that it will likely keep the rate steady in March as the central bank needed to see a sustainable inflation rate at a lower level.
Both international benchmark Brent crude and the West Texas Intermediate (WTI) lost about 7% last week as high interest rates dampen economic growth and oil demand.
On Thursday last week, it was reported that the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, had kept its output policy unchanged. The total agreed production cut is now at 2.2 million barrels per day. The group will meet again in March to decide whether it would want to extend the voluntary oil production cuts.