Thailand's new finance minister may steady skittish markets

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Seniors displaced after Yarmouth fire | SaltWire #fire #yarmouth #seniors #newsSINGAPORE - 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.

A calmer tone from Pichai Chunhavajira, a former Bank of Thailand board member appointed finance minister last month is a potential circuit breaker, market participants say, which could give policymakers more room for stimulus and help sentiment. 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.

Another is structural: A 90% household debt-to-GDP ratio is high by regional standards, dampening the pass-through from lower interest rates to higher growth which was already fuzzy in an economy so exposed to world trends in travel and demand. Still, some conditions are beginning to fall into place and better ties with the government may allow policymakers to act swiftly once the U.S. Federal Reserve begins to cut rates, which would likely come in tandem with investment.

 

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