Thailand Is Already Easing, If You Look at Money Markets

Thailand’s central bank has been dialing back sales of short-term bills to help stem gains in the baht. It may also help them avoid an interest-rate cut.

The Bank of Thailand’s bill issuance has turned negative after it started reducing sales volumes in April. That means the regulator likely hasn’t sold enough of the notes to mop up the liquidity created by its intervention to curb appreciation in the local currency.

“Reduced bill issuance has brought about monetary accommodation as a side effect -- this flush liquidity is supportive of the economic recovery,” said Toru Nishihama, an emerging-market economist in Tokyo at Dai-ichi Life Research Institute Inc. “The BOT will probably stay on hold for a long time.”

The BOT probably bought around $17 billion in foreign currency this year, according to Australia & New Zealand Banking Group Ltd. Thailand hasn’t cut benchmark rate since April 2015.

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