Last Wednesday, Thailand's Monetary Policy Committee came to a fixed resolution of establishing interest rate at 1.50% along with concluding that Thailand's economy is still recovering slowly yet surely. Despite support from government funding, tourism, and increased investments in certain industries in the private sector, there seem to be signs of slowing down stemming from the effects of stimulus spending. The same goes for export value that still sees a contraction with indications of a slow recovery due to economic stagnation of major trading partners, global trade infrastructure and Thailand's ability to compete and make clear-cut decisions. The committee predicts that despite Thailand's economy showing signs of lower growth than predicted, current monetary policies remain lenient and policy space should be maintained.
Return yields for medium and long-term government bonds have increased by 1-4 bps due to industrial investors that have aligned sales and productivity with the US's bonds market that has seen an increase of 4-5 bps. Following the conclusion of three FED administrators wishing to increase interest rates this April. As for the accumulated turnover of government bonds this week, foreign investors made a net purchase totaling at 8.3 billion baht including 7 billion baht worth of bonds under the age of one year.
Taking a look at short-term government bonds, auction results of the 28-day and 93-day-old treasury yielded a result of 1.31568% and 1.32069% per year respectively. As for the auction of 14-day, 91-day and 182-day old national bank bonds yielded an average return of 1.36043%, 1.32709% and 1.3729% (in the order of oldest to youngest). This led to a collective decline of 1-2 bps, another auction of 3-year old government bonds returned with an annual average yield of 1.32805%, with a total decline of 4-5 bps except for the 14-day old bonds that saw a slight increase - due to an auction held after the Monetary Policy Committee's meeting.
Bond Yields of government
| Yield Curve as of / Term | 1-Mth | 3-Mth | 6-Mth | 1Y | 3Y | 5Y | 7Y | 10Y | 15Y | 20Y | 25Y | 30Y |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 30-Dec-15 | 1.50 | 1.50 | 1.50 | 1.50 | 1.73 | 2.16 | 2.37 | 2.51 | 2.94 | 3.16 | 3.50 | 3.59 |
| 29-FEB-16 | 1.40 | 1.41 | 1.44 | 1.44 | 1.52 | 1.74 | 1.91 | 2.13 | 2.57 | 2.77 | 3.17 | 3.22 |
| 18-Mar-16 | 1.37 | 1.36 | 1.36 | 1.36 | 1.39 | 1.53 | 1.60 | 1.81 | 2.17 | 2.29 | 2.80 | 2.85 |
| 25-Mar-16 | 1.36 | 1.36 | 1.37 | 1.37 | 1.39 | 1.53 | 1.65 | 1.84 | 2.19 | 2.30 | 2.77 | 2.82 |
| Weekly Change | -0.01 | -0.01 | 0.00 | 0.01 | 0.00 | 0.00 | 0.04 | 0.03 | 0.02 | 0.01 | -0.03 | -0.03 |
| MTD Change | -0.04 | -0.05 | -0.07 | -0.07 | -0.13 | -0.21 | -0.26 | -0.29 | -0.38 | -0.47 | -0.39 | -0.39 | YTD Change | -0.14 | -0.14 | -0.13 | -0.12 | -0.34 | -0.63 | -0.73 | -0.68 | -0.76 | -0.86 | -0.72 | -0.77 |