Thailand: Bank of Thailand keeps one-day repurchase rate on hold in June
June 22, 2016
At its 22 June monetary policy meeting, the Bank of Thailand (BoT) decided unanimously to keep the one-day repurchase rate at 1.50% as the markets had expected.
In its brief press release, the Bank commented that the Thai economy recovered considerably in the first quarter due to robust public spending and an improvement in tourism. Conversely, private investment decelerated and merchandise exports were weaker than expected. Going forward, the Bank expects economic activity to remain robust even though there are downside risks coming from weak growth in the country’s main trading partners. The BoT added that, “monetary conditions remained accommodative and conducive to the economic recovery as reflected in low real interest rates. Total corporate financing and household credits continued to expand, although certain business sectors faced limitations in obtaining credits.”
Regarding price developments, the Bank said that inflation had increased further in May amid higher prices for energy and fresh food. The Committee assessed that inflation will rise gradually and return to the target range of XX% to XX% in the second half of the year.
Author: Dirina Mançellari, Senior Economist