Thailand: Bank of Thailand keeps one-day repurchase rate unchanged in March
March 23, 2016
At its 23 March 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 in the final quarter of last year, the Thai economy expanded on the back of strong public spending, a pickup in tourism and an increase in private investment. Nevertheless, the expansion was slower than Q3’s increase broadly due to weak exports. The outlook for the external sector remains dim, which mainly reflects a slowdown in the country’s major trading partners as well as Thailand’s declining export competitiveness. The Bank added that, “risks to growth might arise from a fragile recovery of the global economy and monetary policy divergence among advanced economies, which could influence capital flows and exchange rate movements, and had already caused the baht to strengthen during some recent periods, which might not be as conducive to the economic recovery as it could be.”
Regarding price developments, the Bank said that inflationary pressures remain subdued due to low oil prices. Looking forward, the BoT assessed that, “inflationary risks hence skewed more towards the downside.”
Author: Dirina Mançellari, Senior Economist