“Against the backdrop of continued financial stability concerns, the Monetary Policy Committee (MPC) thus voted unanimously to reduce the policy rate by 25 basis points from 2.75% to 2.5% per year,” the…
Source: Bangkok Post
Argh! Yes I was surprised by the rate cut, we could see the bond market was expecting it, however I was hoping that the BOT would hold off on this for a while, ok time to stop pretending to be a central banker and lets just look @ what may happen next.
- Baht will weaken short term – (bond & equity market sell offs)
- Exporters rejoice (wouldn’t be surprised to see 2Q13 & 3Q13 numbers looking better on average)
- Cost of funding decreases – Great for any low margin business that relies on short term financing
- Banks will be affected as their NIM’s will decrease slightly
- Asset prices should continue to increase over time.