Thailand: Bank of Thailand keeps one-day repurchase rate at 1.50%
June 10, 2015
At its 10 June monetary policy meeting, the Bank of Thailand (BoT) decided unanimously to maintain the one-day repurchase rate at 1.50%, as the markets had expected. The next monetary policy meeting is scheduled for 5 August.
The Bank commented that, in the first quarter, the Thai economy expanded at a rate close what had been projected in the previous meeting. Growth was supported by an increased disbursement in public investment expenditure and a pickup in tourist arrivals. Nevertheless, private consumption remained sluggish and exports contracted mainly due to a slowdown in China, one of Thailand’s main trading partners.
Regarding price developments, the BoT commented that inflationary pressures continue to decline due to domestic demand being softer than expected. However, the Bank went on to say that inflation is projected to pick up in the second half of the year driven by an expected increase in oil and raw food prices. In the Committee’s assessment, “the risk of deflation remains low, as consumption continues to increase, while the prices of most goods and services still increase or stay unchanged, and inflation expectations are close to the inflation target.”
Author: Dirina Mançellari, Senior Economist