BENGALURU: Thai stocks moved in a tight range on Wednesday, while the baht gained modestly against the US dollar after the central bank unexpectedly left its key interest rate steady, while a record-setting rally in emerging Asia equities came to a halt.
Thailand’s benchmark stock index fell 0.1 percent after the decision but then regained ground and was last trading up 0.2 percent, while the baht appreciated to 32.400 per US dollar but settled slightly higher around 32.430.
The Bank of Thailand left its key interest rate unchanged, counter to market expectations for a quarter-point rate cut, citing the need to balance support for a fragile economic recovery with limited policy space.
“The main reason they refrained from cutting rates today appears to be concern about preserving policy space,” Capital Economics senior Asia economist Gareth Leather said.
“Despite today’s hold, we think further rate cuts are likely as the central bank tries to boost growth and ward off the threat of deflation. Overall, we are expecting two more 25-bp cuts this cycle, bringing the policy rate to 1.0 percent by end-2026.” In the broader market, the MSCI gauge of equities in emerging Asia fell 1.2 percent from a more than four-year peak scaled on Tuesday. A subset of ASEAN equities, dominated by Singapore, snapped a five-session rally.
Singapore’s index slipped 0.6 percent from a record high, snapping a seven-day rally, while Taiwan shares fell off a lifetime high scaled on Tuesday.
Asian equities soared to multi-year highs recently on enthusiasm for artificial intelligence and robust momentum in chip stocks, only to stall abruptly, as a prolonged US government shutdown and a dearth of economic data stoked risk aversion.
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