The judges voted to scrap the 2 trillion baht ($62 billion) bill because the contents in the draft violate the constitution, according to a court press statement. Policy makers lowered borrowing costs to 2 per cent from 2.25 per cent, as expected by 16 of 26 economists surveyed by Bloomberg. A statement issued after the decision said political unrest will hurt domestic demand and a rate cut should boost confidence.
“The court ruling would mean the economic picture for Thailand will be worse,” said Disawat Tiaowvanich, a foreign-exchange trader at Bangkok Bank Pcl. “I remain bearish on the baht on the weak economic picture.”
The baht fell 0.4 per cent, the biggest loss since Feb 18, to 32.430 per dollar as of 2:40pm in Bangkok and reached a one-week low of 32.470, according to data compiled by Bloomberg. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, dropped two basis points, or 0.02 percentage point, to 6.56 percent.
Gross domestic product rose 0.6 per cent in the fourth quarter, the least since the first three months of 2012, official data show.
Government bonds climbed. The yield on the 3.125 percent notes due December 2015 dropped one basis point to 2.25 percent, data compiled by Bloomberg show.