BOT injects Bt35 billion into financial market to ease Covid-19 impact
The Bank of Thailand has injected Bt35 billion into the local financial market disrupted by the Covid-19 crisis. The central bank has closely monitored the financial market and found liquidity has become tight in bond and US dollar exchange markets, so the bank last week injected both short and long term government bonds worth Bt35 billion, assistant governor Vachira Arromdee said today ( March 17).
The central bank also injected money into the foreign exchange market to enhance liquidity of US dollars in the market, she said.
Her announcement came as foreign investors made a net-sell of Thai bonds worth of Bt72.5 billion year to date as of March 16. Investors also dumped Thai shares, sending the Stock Exchange of Thailand Index into a downward spiral of more than 30 per cent since early January. The baht currency has weakened as well, today passing the threshold of 32 per dollar.
The latest Thai central bank action is in line with global central banks, which are rescuing markets via bond purchases and rate cuts to prevent economies sliding into a recession due to the severe impact of the coronavirus pandemic. The US Federal Reserve also cut its benchmark rates to 0.25 per cent.
Some analysts believe the Thai central bank will cut its benchmark rate to 0.75 per cent from the current 1 per cent at a meeting scheduled for March 25.
