STOCK MARKET WATCH -- Friday, 17 January 2014

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30. Thai Turmoil Bruising Growth Spurs Pressure for Key Rate Cut

http://www.bloomberg.com/news/2014-01-16/thai-turmoil-bruising-economy-spurs-pressure-for-second-rate-cut.html

Thailand probably will cut its benchmark interest rate for a second straight meeting next week as protests to oust Prime Minister Yingluck Shinawatra’s government crimp economic growth.

The Bank of Thailand will cut its one-day bond repurchase rate by a quarter of a percentage point to 2 percent in a decision due Jan. 22, according to seven of eight economists in a Bloomberg News survey. The finance ministry yesterday lowered its 2014 growth forecast for the second time in a month, to 3.1 percent from 4 percent.

Yingluck dissolved parliament in December and has spent weeks resisting anti-government protesters who want to remove her and the influence of her brother, Thaksin. The turmoil has hurt the economy and currency, and any delay in setting up a new government will dent investment, Finance Minister Kittiratt Na-Ranong said yesterday. The country has at least 2 trillion baht ($61 billion) in infrastructure spending planned.

“Monetary policy needs to do the job of supporting the economy because the fiscal side is paralyzed now,” said Kampon Adireksombat, a senior economist at Tisco Securities Co. in Bangkok. “We still need to fix the political problem” because a rate cut won’t stop the protests or boost growth, Kampon said.