Baht Weakens As FinMin Arkhom Toys Idea Of Interest Rate Freeze

Spot USD/THB finds poise at the re-open, albeit yesterday's best levels have remained intact so far. The rate sits +0.120 at THB35.423 at typing, with bulls looking to a move through THB35.442, which capped gains on Tuesday. Above there, focus would turn to Jan 9, 2017 high of THB35.799 & Dec 21, 2016 high of THB36.070. Bears look for a retreat past Jun 16 low/May 13 high of THB34.830/34.783.

• FinMin Arkhom said Tuesday that monetary policy should address both inflation and growth, adding that this view is shared by the BoT. He noted that the central bank could discuss with commercial banks if they could implement an interest-rate freeze, should policymakers decide on a rate hike. Note that BoT Gov Sethaput recently said that he would prefer to avoid delaying rate hikes for too long.
• The Finance Minister also noted that the BoT is closely monitoring THB movements, but it is "difficult" to guide the currency as its weakness stems from external factors, including sharp USD appreciation.
• Elsewhere, the Cabinet gave a nod to a package of measures to cushion the blow from a surge in global oil prices and boost local tourism. The government will subsidise some retail energy prices between Jul & Sep and seeks a profit-sharing deal with local refiners.
• The BoT will release the minutes from its June 8 monetary policy meeting shortly, with the Monetary Policy Report coming up later in the day. Elsewhere, National Economic & Social Development Council (NESDC) chief is set to speak at a seminar.