Savings Bonds A Key Litmus Test

While the authorities have repeatedly reassured investors that there is sufficient domestic liquidity to absorb the government's planned THB800bn (US$23.5bn) worth of borrowing to finance its THB1.43trn fiscal stimulus programme, the jury is still out on the degree to which this can be achieved without pushing yields higher. So far the market appears to have responded with relative indifference to the bumper issuance, with bonds having bounced back in recent weeks (see chart below).

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