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Thailand's 2-year bond yields have.........>

THAILAND: Thailand's 2-year bond yields have surged by 25bps over the past month
alone as traders price out any further monetary easing by the BOT. The 2-year
yield now sits at 1.48%, roughly in line with the BOT's overnight rate of 1.50%.
- As we argued in a previous article "Higher Global Rates May Push Bank of
Thailand To Act" (For Full Story See Main Wire, 03/13), while the BOT maintains
a neutral stance, arguing that rising global rates do not warrant higher Thai
rates, THB weakness will pile on the pressure for the bank to shift to a hawkish
- The BOT's next monetary policy decision comes on May 16, and MNI expects the
bank to remain on hold but note the increased risk of keeping overnight rates at
1.50% amid rising upward pressure on rates and inflation globally.
- Should global oil prices continue to rise, the BOT could find itself in a
difficult spot given the country's high level of energy dependency, resulting in
a combination of weakening growth and rising inflation.

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