Thailand
Thailand: Baht shrugs off rate cut
The baht is defying the conventional wisdom that an interest-rate cut spurs weakness in a currency.
The currency rose 0.2% on Thursday, erasing all of its decline the previous day when the Bank of Thailand delivered a surprise rate cut. The baht has proved resilient amid this month’s market turmoil and is up about 8% in the past 12 months, the top performer in emerging markets.
“With limited tools to curb gains, the trend of the baht’s outperformance is unlikely to change in the near future, providing a challenge for the monetary authorities,” said Hironori Sannami, an emerging-market currency trader at Mizuho Bank in Tokyo.
The rate cut was the latest salvo as the Bank of Thailand intensifies its efforts to restrain the currency, whose strength poses a risk to the economic pillars of exports and tourism. The central bank has already reduced the supply of short-term bills and trimmed the limit on outstanding non-resident baht accounts.
Source: https://www.bangkokpost.com/business/1726715/baht-shrugs-off-rate-cut