BENGALURU: Thai stocks and the baht were largely unchanged on Wednesday after the country’s central bank stood pat on rates, as expected, while other Asian currencies and equities rose as easing Middle East tensions lifted sentiment.
The currency was trading at 32.623 per dollar after the Bank of Thailand (BoT) held its key one-day repurchase rate steady at 1.75%, following two straight cuts, as it looked to preserve limited policy space amid persistent trade uncertainty and deepening political turmoil.
The central bank said its monetary policy remained accommodative to support the economy and that it was ready to adjust interest rates if needed.
“BoT’s tone remains dovish, pointing to room for further accommodation in the coming months. Our baseline is for another 25 basis point cut in 2H25 as downside risks to growth remain rife from perceived domestic political uncertainties and US tariff risks,” said Lavanya Venkateswaran, senior ASEAN economist at OCBC.
The country has been gripped by political uncertainty after the Bhumjaithai Party, fresh off its exit from the ruling coalition, said it would pursue a no-confidence motion against Prime Minister Paetongtarn Shinawatra and her cabinet, piling pressure on the embattled government.
Thai stock market, which fell as much as 0.8% earlier in the session, was 0.2% down after the policy announcement.
Globally, markets welcomed a fragile truce between Israel and Iran, even as tensions lingered after Israel warned of a forceful response to Iranian missile strikes that followed US President Donald Trump’s ceasefire announcement. The Israeli shekel was down 0.2%.
The dollar index weakened 0.1% against a basket of currencies, as markets reacted to the ceasefire news with improved risk appetite. Back in Asia, the Philippine peso and Indonesian rupiah strengthened 0.8% and 0.3%, respectively, while the Taiwan dollar was up 0.6%.
“With the Middle East tension easing, focus going forward we move back again to the trade situation and the timing of the Fed cut,” said Alan Lau, FX strategist at Maybank.d 0.5%.
