Analysts predict that the MPC will not cut interest rates around April 10 if there are any surprises. What will happen?
On April 10, 2567, there will be a meeting.Monetary Policy Committee (MPC) Regarding interest rate policy, and this round is considered an important day that the money market, Thai capital market, and the business sector are waiting to see whether to reduce or maintain interest rates under economic pressure.
Asia Plus Securities Analyzed the differences between reducing/not reducing interest rates. Trinity Securities Looking at commodity prices pushing up inflation And the current Thai economic problems cannot be solved with direct interest tools. And if there's a surprise What will happen? Bank Finance will take you to find the answer.
Asia Plus Securities' hypothesis: If the MPC cuts interest rates, what will happen?
• The MPC cuts interest rates around April 67. It will help support the economy to a greater or lesser extent.
Even though it cannot help solve the structural problem. But it can solve only debt problems. such as household debt being at a high level by the current Thai economy is in a state of growth below potential and there is a risk of recession. From the figures for the growth of Gross Domestic Product (GDP Growth) that grew the lowest in ASEAN and the latest month's inflation rate that continued to contract -0.47% YOY.
while from the perspective of the Thai stock market It has an advantage as well, namely, it increases the upside chance of the target index (SET Index) by approximately 60-70 points and helps increase trading value by approximately 3,000-4,000 million baht per day.
• In the case where the MPC maintains interest rates for April 67.
This will cause direct and indirect foreign capital (FDI) to slow down from leaving Thailand. and the value of the baht that will not depreciate any more According to the US-Thailand interest rate difference that remains at the same level.
Asia Plus Securities concluded at the end that US interest There is an opportunity to maintain interest for a longer time. Because economic numbers indicate that the economy is strong. This is different from Thailand where economic numbers indicate a weak economy. and should be motivated by monetary policy However, the market expects that the MPC meeting This round (April 10), interest rates will remain at the same level. We must follow what the results will be, which is expected to determine the direction of the Thai stock market in the next period.
Current Thai economic problems cannot be solved using direct interest tools.
Trinity Securities It is expected that the MPC has many reasons for not yet cutting the policy interest rate at its meeting on April 10, 2567, whether it be the reason for inflation that is preparing to return to rise after the energy price fixing measures end. Upside risk of inflation in the next period that may erupt after commodity prices gradually rise. Including problems in the Thai economy at this time that cannot be solved with direct interest tools.
However, if the MPC cuts interest in reducing interest rates at this time It will be considered a surprise decision. majority group Reflected through the perception (Price in) of the Swap market today that the probability of an interest rate cut is 44%.
There was a surprise in 2014 when Thai stocks dropped 1.3%, foreigners sold 5.6 billion baht.
From a study by Trinity Securities in the past, it was found that the interest rate reduction was a surprise. of Thailand since 2014 Such events often lead to weakness in Thai stocks (SET Index) and capital flows (fund flows) and the value of the baht. As for the SET index, it usually decreases by an average of about 1.3% in the 1 week after that. As for the attitude of foreign investors There was often a net sale of 5,600 million baht on average during the same period. As a result, the baht depreciated by approximately 0.7% on average.
Let's look at the statistics of the baht value. from the baht which tends to depreciate in statistics When combined with the interest rate difference between Thailand and the United States that will widen further because until the Fed cuts interest rates, it will probably happen in June. 2567 is the fastest, making Trinity Securities I'm pretty confident that if the MPC actually cuts interest rates this time (10 April 2567), the baht will have a chance to depreciate to the level of 36.8-36.9 baht/dollar without difficulty.
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