Thailand Monetary Policy May 2016

Thailand

Thailand: Bank of Thailand keeps one-day repurchase rate unchanged again in May

May 11, 2016

At its 11 May 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 advanced amid high public spending and a considerable improvement in tourism. Nevertheless, private investment remained low in the first quarter and expansions were recorded only in few business sectors. Adding to that, the BoT commented that the ongoing draught negatively affected income of agricultural household in Q1. The Bank added that “As such, the balance of risks to economic growth was judged to be tilted more to the downside than previously assessed. Meanwhile, the global economic recovery remained fragile. In addition, the baht, which strengthened against some trading partner currencies in some recent periods, might not be as conducive to the economic recovery as it could be. Going forward, monetary policy divergence among advanced economies will continue to be a major contributing factor to capital flow and exchange rate volatility.”

Regarding price developments, the Bank said that consumer prices increased on an annual basis in April as the base effect of high oil prices advanced slightly and prices for fresh food increased amid temporary factors.

FocusEconomics Consensus Forecast panelists expect the one-day repurchase rate to end 2016 at 2.01%. In 2017, the panel expects the monetary policy rate to end the year at 2.35%.


Author:, Senior Economist

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Thailand Monetary Policy May 2016

Note: One-day repurchase rate, in %.
Source: Bank of Thailand (BoT).


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