Diverging central bank policies leave Thailand’s real yields negative, pressuring the baht while the won gains on expected Korean hikes.
The Bank of Thailand is set to maintain its benchmark rate at 1.00%, keeping real yields negative and weighing on the Thai Baht. Analysts cite limited policy flexibility amid subdued inflation and growth concerns, contrasting with regional peers tightening monetary conditions.
South Korea’s central bank is expected to raise rates further to 3.00%, supported by above-target inflation and robust economic activity. The divergence highlights the won’s relative strength against the baht, which has underperformed in Asia FX markets.
No immediate market reaction was specified, but the policy outlook suggests continued pressure on the baht as investors favor higher-yielding currencies.