Thailand: Bank of Thailand keeps one-day repurchase rate unchanged in January
February 3, 2016
At its 3 February 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.
In its brief press release, the Bank commented that the Thai economy is expected to have recovered in the final quarter of 2015 as it was broadly supported by an increase in public expenditure and a pickup in tourist arrivals, especially from China. Nevertheless, the country’s external sector remains a significant risk to the economy as a slowdown in the other Asian economies is weighing on merchandise exports.
Regarding price developments, the Bank said that inflationary pressures continue to decline due a slower-than-projected recovery in global oil prices, thus causing the annual variation in consumer prices to remain in negative territory. The Bank added that consumer prices will likely recover and start increasing in the first half of 2016. Looking forward, the BoT assessed that, “deflationary risks remain contained as demand continues to expand and core inflation is still positive, consistent with medium-term inflation expectations of the public.”
Author: Dirina Mançellari, Senior Economist