SINGAPORE - Thailand's new finance minister has caught investor attention with a more conciliatory approach to the central bank, opening a window for policy coordination to support battered markets.
Some $5.5 billion in net outflows from Thai stocks last year has been followed by another $1.9 billion in net selling in 2024. The benchmark SET index is down 4% this year and touched three-year lows, making it the worst performer in Asia. Pichai has said he has a duty to work with the central bank and there are no plans to weaken its independence while public calls from Prime Minister Srettha Thavisin for rate cuts have paused. The central bank meets to set rates on June 12.
"You can try to entice people to spend now by lowering the cost of money and hopefully they borrow more and then consume or invest," said Pongtharin Sapayanon, abrdn's head of Thai fixed income and asset allocation in Bangkok. Inflation in Thailand has run below the central bank's target for a year and last month the finance ministry cut its growth target to 2.4% from 2.8% previously.