Business
Markets uneasy as baht stabilises, euro weakens
The baht recorded stability amid two important monetary policy deliberations in China and Europe in the past week, but the market remains concerned about emerging economies' growth, says the Bank of
Thailand.
The euro has depreciated from US$1.135 to $1.10 recorded yesterday morning, central bank spokesman Chirathep Senivongs Na Ayudhya said.
Financial markets were keen on the European Central Bank's (ECB) meeting last week, with the ECB maintaining its policy interest rate at 0.05% while keeping its monthly asset purchase programme at €60 billion (2.35 trillion baht) until next September or until inflation reaches the bank's 2% target, Mr Chirathep said.
"But financial markets have assessed the [ECB] statement as indicating concerns about the economic growth outlook in emerging economies, which in turn could be considered a downside risk for euro-zone countries in the coming period," he said.
The ECB will assess the degree of monetary policy accommodation again at its next meeting in December.
Meanwhile, the People's Bank of China (PBoC) last Friday decided on further monetary easing through a 25-basis-point reduction in interest rates for lending and deposit under one year while lowering the reserve requirement ratio by 0.5 percentage points for financial institutions providing loans to small and medium-sized enterprises and rural areas, Mr Chirathep said.
"It's another measure by the Chinese authorities aimed at stimulating the economy to achieve their [growth] target," he said.
Mr Chirathep said the PBoC announcement caused most regional currencies to weaken slightly.
Developments being followed by financial markets this week include meetings by the Bank of Japan and the US Federal Open Market Committee as well as the Chinese Communist Party's plenum on its five-year development plan, he added.