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Asia FX firms up as central bank paths diverge for THB, KRW, PHP

BBH expects the Bank of Thailand to keep rates at 1.00%, while it forecasts the Bank of Korea to hike again to 3.00% and the BSP to lift to 5.00% after USD/PHP hit record highs near 62.00.

Reported · Written up by our desk · Central Banks

Brown Brothers Harriman’s (BBH) Elias Haddad said the currency outlook across Asia hinges on different central bank paths, with Thailand expected to lag as real yields remain negative.

BBH expects the Bank of Thailand (BoT) to hold its policy rate at 1.00% for a third straight meeting, which it said should keep the Thai baht (THB) as an Asian FX laggard.

BBH also expects the Bank of Korea (BoK) to deliver a back-to-back 25 basis point hike to 3.00%, supporting the South Korean won (KRW) as growth and inflation are seen running above targets.

For the Philippines, BBH forecasts the Bangko Sentral ng Pilipinas (BSP) to implement a third consecutive 25 bps hike to 5.00% to curb Philippine peso (PHP) weakness, noting USD/PHP rallied to record highs near 62.00, supported partly by firmer oil prices.

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