The Thai baht continued to remain strong in Q3 2019, hitting a 6-year high against the USD and a 10% Y-o-Y increase against the CNY. However, Thailand’s economic growth this year is projected to slowdown due to the export contraction and lower private investment.
In August 2019, the Bank of Thailand decided to cut the policy rate by 25 basis point to 1.5%, to boost the economy. As a result, the 10-year government bond yield dropped by 69 bps Q-o-Q and 127 bps Y-o-Y to 1.54% compared to the 1-year government bond yield at 1.40%. This was the lowest yield spread in 10 years.
Meanwhile, major developers have slowed down their land acquisition in prime locations to focus on clearing their unsold inventory and to wait for the final details of the new Bangkok City Plan.