Fresh Highs For USD/THB, BoT Warns On Fiscal Instability

USD/THB closed at 35.79 on Thursday, a touch above Wednesday closing levels, with dips in the pair generally supported. Lows yesterday were in the 35.60/65 region. The Nov 28 2022 high of 36.07 beckons as the next upside target. On the downside, the Sep 11 low at 35.43 may act as a support, while the 20-day EMA is back near 35.36.

• Thailand equities were firmer yesterday, up 0.64%, but the index is yet to break back above the 1550 level. Offshore investors added $34.9mn to local equities yesterday, but outflows week to date sit at -102.3mn. This investor base has also sold -$44.2mn of local bonds.
• The BOT has expressed some concern around the new Government's fiscal plans. The governor stating that cash handouts should only be targeted to specific groups and that debt relief for farmers/SMEs shouldn't be the only strategy utilized to lower debt levels.
• The Governor added fiscal instability could have broader macro implications (he cited the US government and the recent debt downgrade as an example). The BOT also sees upside risks to inflation (see this link for more details).
• New PM Srettha stated the government will maintain fiscal discipline and that public debt to GDP won't rise significantly.