BENGALURU: Thai stocks jumped on Wednesday after the central bank delivered a surprise interest rate cut, while the baht traded almost flat against the US dollar.
The Bank of Thailand cut its interest rate by a quarter point amid government calls for easing to support the economy and weaken the local currency to boost exports. Sixteen of 26 economists in a Reuters poll had expected no policy change.
The decision was probably spurred by below-expected gross domestic product readings and some monetary easing by other Asian central banks, said Jeff Ng, head of Asia macro strategy at Sumitomo Mitsui Banking Corporation.
Ng said he anticipates one or two more cuts this year if downside risks emerge from potential US tariffs on Thailand or a global or regional economic slowdown.
He expects the rate cuts to moderate the strength of the baht, which has been the region’s top performer so far this year.
The BOT joined the Bank of Korea in easing monetary policy, while the central banks in Indonesia and the Philippines kept their rates steady earlier this month.
Bangkok stocks rose 2% after two straight sessions of falls, while the baht was trading almost unchanged.
Among other Asian stock markets, Manila and Kuala Lumpur rose 1.3% and 1.2%, respectively. A gauge of emerging Asian equities advanced as much as 1.72%.
In currencies, the Singapore dollar, the Malaysian ringgit, and the Indonesian rupiah gave up 0.2% each.
The Taiwan dollar traded flat. The island slightly revised down its economic growth forecast for this year to 3.14%, from 3.29% predicted earlier.
The US dollar index, which measures the currency against six major rivals, rose 0.3%, bouncing back from an 11-week low on a rebound in short-term Treasury yields.
