Thailand Monetary Policy


Bank of Thailand keeps one-day repurchase rate on hold

At its 23 April monetary policy meeting, the Bank of Thailand (BoT) decided to maintain the one-day repurchase rate at 2.00%. The decision was on par with market expectations. The one-day repurchase rate currently sits at its lowest level in three years. According to the Bank, the economy is expected to contract more than estimated in the first quarter due to weakening domestic demand. The economic drag caused by political unrest has had the biggest impact on tourism and private consumption. Conversely, exports of goods have been improving gradually. The Bank went on to say that, “the prospect for economic recovery hinges importantly on the political developments.” Regarding price developments, it stated that inflationary pressures were developing in line with the Bank's expectations. Taking into consideration the latest economic developments, the BoT's view is that, “current monetary policy remains appropriately supportive of the Thai economic recovery.” Six of the seven members of the MCP voted in favor of keeping the one-day repurchase rate unchanged, thereby outvoting one member who advocated for lowering the repurchase rate by 25 basis points. The next monetary policy meeting is scheduled for 18 June. FocusEconomics Consensus Forecast panelists expect the one-day repurchase rate to end 2014 at 2.92%. In 2015, the panel expects the monetary policy rate to end the year at 3.20%.

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