Published at 04:23 (GMT) 03 Feb
Overnight dollar retreat pushed USD/THB lower this morning with prices dropping to around 32.50, with brief tests below the figure seen. Sustained break of the 32.50 barrier will open scope for more downside to next strong target at 32.380. Equity rally also add to downward pressure in the pair as SETi seeks to re-test above 1,600. Foreign funds bought a net THB752.8mn of Thai bonds while selling a net THBTHB350.3mn of local stocks yesterday.
Meanwhile, the government plans to cut rice production to reduce a local surplus and boost prices, complementing its drive to sell record stockpiles (BBG). According to vice farm minister Apichart Pongsrihadulchai, rough-rice output may be cut to 33.73mn MT by 2016-2017 from an average of 35.11mn over the past six years. Mr Pongsrihadulchai added that the farmers will be encouraged with incentives including soft loans to shift from rice to sugar cane or to mixed farming with livestock. Separately, private bus operators in Bangkok are pulling their vehicles off the roads while they wait for news of whether the government will approve their request for a three-baht fare increase. They say the fare rise is needed to help them cope with increasing fuel prices for natural gas vehicles (NGV). BA
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