Thailand’s SET Index closed at 1,462.10 points, increased 14.20 points or 0.98% with a trading value of 56.80 billion baht. The analyst stated that the Thai stock market exhibited a positive trend in tandem with the Asian markets, following the announcement of easing monetary policies from the People’s Bank of China in efforts to stimulate the economy. This gave a boost to stocks that depend on consumption in China, especially the petrochemical sector, while the continuous appreciation of the Thai baht also contributed to the increase in inflows from foreign investors.
The analyst expected the Thai market to trade sideways tomorrow.
People’s Bank of China Gov. Pan Gongsheng revealed that China will reduce the reserve requirement ratio (RRR) for banks by 50 basis points in the near term and also mentioned the possibility of a further 0.25 to 0.5 basis point cut by the end of the year, depending on conditions.
After lowering the 14-day reverse repo rate by 10 basis points to 1.85% on Monday, whilst keeping the 7-day reverse repo rate unchanged, Pan also expressed a desire for the 7-day rate to serve as the primary policy rate and plans to reduce the rate by 0.2 percentage points.
Bank of Japan Governor Kazuo Ueda remarked that the central bank can afford to monitor developments in financial markets and global economies while formulating monetary policy, indicating a lack of urgency to raise interest rates.
He expressed a desire to analyze service-price data for October, due to be released in November, to assess whether underlying inflation is progressing toward the BOJ’s 2% target, underscoring the importance of the upcoming data.
Two officials of the Federal Reserve gave further clarification on their decision to back the 50-bps cut as opposed to a smaller one during the meeting last week, reiterating inflation and labor market.
Neel Kashkari, President of the Minneapolis Federal Reserve, explained that the risks have repositioned from inflation towards the withering job market which “warrants a lower federal funds rate.”
Meanwhile, President of the Chicago Fed Austan Goolsbee explained that the cut derived from the central bank giving as much thought to an optimal employment as the price stability.
