Thai baht dips ahead of rate decision, Asia shares hold small gains
Wednesday,
18-Nov-2020
10:26 AM (IST)
The Thai baht inched lower on Wednesday ahead of a central bank meeting where rates are expected to be kept on hold but policymakers may voice concern over the currency's recent strength. Broader Asian stock markets, meanwhile, held onto modest gains despite a global pullback in equities. Stocks in Manila and Singapore rose around a third of a percent, while in Jakarta they rose 0.5% as investors bank on the region's relative success in controlling the pandemic to fuel a stronger economic recovery. Relief over coronavirus vaccine developments over the last week has been overshadowed by a surge in cases globally and fresh social restrictions that threaten to wreck any immediate hopes for a recovery. Soft U.S. retail sales overnight signalled the fragile economic situation and sent Wall Street lower. Thailand's central bank is set to leave rates at a record low of 0.5% as GDP earlier this week showed signs that the worst may be over. Over November, Thai stocks have jumped over 13%, while the currency has gained around 3% on the dollar, leading some to question whether the baht's strength would hamper a recovery for the tourism-and trade-reliant economy. On Wednesday, the baht dipped 0.3% and stocks, the region's worst performer this year, rose 0.4%. The rupiah, a favourite among foreign investors looking at Indonesia's high-yielding bond market, fell 0.2%. Bank Indonesia is slated to keep its benchmark 7-day reserve repurchase rate steady at 4% on Thursday, for the fourth straight meeting. Philippine's central bank is also meeting on Thursday to decide rates.
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