Coalition Negotiations Continue, Political Uncertainty Weighing On Baht

There is still significant uncertainty over the formation of a new government following elections over two weeks ago. Talks between the two main opposition parties are scheduled for today at 1430 local time. USDTHB strengthened ahead of the election but given the uncertainty since has weakened and is currently around 34.79 close to Monday’s high of 34.89.

• The Bank of Thailand is widely expected to hike rates 25bp to 2% on May 31. See MNI Bank of Thailand Preview here.
• Move Forward leader and PM candidate Pita told the BBC that his coalition currently has 312 seats, which means it will still need 64 senators to support Pita as PM. They are aligned with the military, but some are prepared to support Pita as PM, especially those whose terms expire in a year, as they are hesitant to go against the will of voters.
• A Suan Dusit Poll is showing that at the end of May 67.8% of those surveyed had doubts a new coalition government could be formed.
• Move Forward and Pheu Thai are still disagreeing over which party should take on the important House speaker role. Pheu Thai says they have the experience, while Move Forward needs the position to table its agenda.
• The Bangkok Post is reporting that a Pheu Thai PM candidate Srettha has denied a “secret deal” to form a coalition without Move Forward. Former PM Thaksin and his daughter Paetongtarn, another Pheu Thai PM candidate, have publicly voiced their support for Move Forward. There has been increasing pressure from supporters to move away from Move Forward.
• The Election Commission has begun its investigation that Move Forward’s leader Pita owned a stake in a media company, which is forbidden in the constitution. If it finds he broke this law, then the Constitutional Court will make the final decision and during that time Pita could be suspended. A ruling against him risks significant unrest given his popularity and election win.
• PPRP member Ruangkrai has said that if Pita becomes PM and Move Forward forms a government, then he will complain to the Election Commission to look at their qualifications with the intent of breaking it up, according to the Bangkok Post.