(Bloomberg) — Thailand’s stocks and currency may be further buoyed by inflows after the Bank of Thailand eased policy to bolster growth, according to analysts.
Financial firms and property developers are likely to benefit from the interest-rate cut, while the baht may be supported from foreign inflows. That said, political uncertainty remains a risk and may raise asset volatility later in the quarter, analysts said.
The central bank’s Monetary Policy Committee voted unanimously to cut the one-day repurchase rate by 25 basis points to 1.5%. The baht extended gains to 0.6% after the policy decision, while the stock benchmark SET Index jumped as much as 1.7%.
READ: Thailand Cuts Key Rate, Braces for Protracted Growth Slowdown
Here’s what analysts and strategists are saying:
Koraphat Vorachet, an analyst at Krungsri Securities Co.:
“We estimate every 25 basis-point cut in BOT’s key policy rate will boost the benchmark SET Index by as much as 55 points. We recommend shares which are sensitive to downward interest rates such as finance companies, property developers and power producers. Companies with high debt will also benefit from lower borrowing costs”
Jitipol Puksamatanan, head of investment strategy at Finansia Syrus Securities:
While a narrower rate differential with the US typically adds to depreciation pressure on the baht, “the short-term effect is being offset by foreign inflows. In 3Q25, I still view political uncertainty as the more significant driver ahead, with the potential to deter future inflows and increase volatility”
While the market is starting to price another 50bps of cuts into the front end of the ThaiGB curve, “political uncertainty could add further flattening pressure to the curve, as investors seek longer maturities for safety”
“Nevertheless, I expect the new governor will face strong challenges from both the government and the BOT, making further cuts difficult if the data improve”
Frances Cheung, head of FX & rate strategy at Oversea-Chinese Banking Corp:
“The focus is on supporting growth given headwinds from US trade policy. While the rate cut had been in the price, THB OIS fell upon the decision, as the prospect remains for further easing and the market is adding to rate cut expectation. That said, ThaiGBs have outperformed swaps over the past months, and at current bond/swap levels, any further bond rally may be less rapid”
Wee Khoon Chong, senior APAC market strategist at BNY:
“The cautiously dovish tone suggests further easing as a possibility. We are not against further monetary policy easing but have doubts on its effectiveness. For now, our view is for BOT to keep rate unchanged at the next meeting and reassess the full impact of tariffs.”
BOT easing is “definitely positive for bonds. Rate cuts and low inflation are great for bonds. BOT easing in theory would weigh on THB, however, the renewed foreign inflows and weak USD is likely to keep USD/THB low, if not lower”
Kobsidthi Silpachai, head of capital market research at Kasikornbank:
“We will be having a leadership change after September — a new BOT governor in October.” While the new governor Vitai Ratanakorn “is seen to be dovish, this cut has reduced the BOT’s policy space”
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