Next year, the baht will appreciate to 28.9 baht per dollar. “SCB Securities” expects the MPC tomorrow to maintain policy interest
Dr. Jitipon Pruksa Metanan Senior Director, Chief Investment Office, Siam Commercial Securities Co., Ltd. (SCBS CIO) said that the Monetary Policy Committee (MPC) is expected tomorrow (23 Dec) to “stabilize” the policy interest rate at 0.50 level. % As market expected In this regard, the MPC is expected to see that the Thai economy has recovered but is likely to recover slowly. And may give a more cautious view after the latest outbreak in Samut Sakhon. Thus, coordination between the government and the adoption of a more relaxed monetary policy is still essential.
Meanwhile, interest rates and bond yields (Bond Yield) expect Thai bond bonds to remain volatile. As no other asset yields better at the same level of risk, however, the two-year government bond bond fell 0.41% below policy interest and is the lowest in history. Indicates that investors are still afraid of the risk. And the liquidity in the system is still in the high system Believe that if you start to see the progress of the tourism opening in the end Likely to bring these funds back into the capital market And maintain the same view that the two-year Yeal will rise to 0.75% by the end of 2021, in line with the direction of the Global Bond.
The long-term (10-year) brand is expected to oscillate in the 1.25-1.45% level through the end of the year. And it is forecast that in 2021, the 10-year Thai Yeal can rise to 1.70%, however, the chance that the Yild will immediately rise is not that much. The strong baht will make the Thai bond attractive to both Thai and foreign investors.
On capital flows, Dr. Jitipon said the low interest rate stabilization of the BOT did not affect the views of foreign investors. Because only a small percentage of them invest in short-term debt instruments for speculating on the money. And more than half focus on medium term bond investment It is believed that there will be foreign investors to buy bonds in Thailand in 2021 at the level of 1-2 billion dollars. This is close to the 2016-2019 average, but Thai stocks are believed to have little selling pressure because they will need to reorganize their investment in Emerging Markets as more Chinese stock markets are selected into the index. Therefore may see capital flowing out
As for the baht, it is believed that the BOT would have expressed concern over the rapid appreciation of the baht during this period. But it is unlikely that there should be a policy to direct or intervene in the baht during this year to the next year. Especially when Thailand was placed on the US Treasury’s surveillance list.
As for the future view The baht is expected to trade at 29.75-30.00 baht per dollar at the end of this year, but by 2021, Asian currencies and the baht are believed to be driven by the global economic recovery and commodity prices. While the dollar has a higher chance of depreciation from US fiscal policy than any other country. And it is expected that the baht will appreciate to reach 28.9 by the end of 2021.
“In summary, it is expected that the results of the MPC meeting of the BOT this time Will not change the picture of the money market in the country much And believe that Bond Yeel Thai will remain low. At the same time, the baht has a chance to appreciate So for Thai businessmen It can be viewed as an opportunity to take out low interest loans for businesses in the long term. But exporters may have to prepare for the appreciation of the baht. In the future, more trading partners may choose to use the currency of the trading partner country. Or take out foreign exchange risk insurance at the same time, “said Dr. Jitipon.
Dr. Jitipon said that in the investor side An issue that needs to be considered even more when investing is the shareholding in Thai bond. Which now offers very low returns as a risk to long-term investment goals. Recommend to use the appreciation of baht to your advantage. With increasing foreign investment By introducing a combination of global investments In both equity funds, group stocks rally on the economic cycle (Cyclical) and large stocks that are expected to provide consistent returns (Income) at the same time.
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