BANGKOK, Jan 28 — The baht retreated from a three-month high after Singapore’s central bank unexpectedly eased monetary policy, raising the possibility that Thailand will follow suit at a meeting later today.

Six of 22 economists surveyed by Bloomberg forecast the Bank of Thailand will cut its benchmark rate by 25 basis points to 1.75 per cent, while the rest see no change. Singapore joined other monetary authorities around the world, including the European Central Bank, Canada, Denmark and India, to loosen policy amid slowing economic growth and deflation risks.

“We still view this meeting as a close call,” Euben Paracuelles, a Singapore-based economist at Nomura Holdings Inc, said by email. Slowing inflation, the weak export outlook and the baht’s gain versus the dollar will justify a Bank of Thailand rate reduction, he said.

The Thai currency fell 0.2 per cent to 32.62 a dollar as of 10.09am in Bangkok, according to data compiled by Bloomberg. The baht has gained 0.8 per cent this year, heading for its biggest monthly advance since July and making the nation’s exports less competitive at a time when growth is slowing.

Finance Minister Sommai Phasee last week said the monetary authority should “in theory” lower borrowing costs, and that exports are under pressure from a stronger baht. The currency climbed to 32.48 a dollar today, the strongest level since October 31.

Bonds rise

The Bank of Thailand, which has kept its rate unchanged since cutting it to 2 per cent in March, has lowered 2015 forecasts for economic growth and overseas shipments because the recovery is hampered by the weaker outlook for domestic consumption and global demand.

Nomura is one of the six predicting a 25 basis-point rate cut before the decision due at 2.30pm local time. Thai inflation eased to 0.6 per cent in December from a year earlier, the least in Southeast Asia and the lowest since 2009.

While there is a growing probability that Thailand’s headline inflation will slow to below the central bank’s target range of 1 per cent to 4 per cent, the current policy rate is “already accommodative” and remains supportive of the economic recovery, the central bank’s Senior Director Roong Mallikamas said in an interview January 9.

Five-year government bonds advanced, with the yield falling three basis points, or 0.03 percentage point, to 2.33 per cent, according to data compiled by Bloomberg. — Bloomberg