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Thailand Monetary Policy December 2019

Thailand: Bank of Thailand stands pat in December

At its 18 December Monetary Policy Committee meeting, the Bank of Thailand opted to stand pat and keep its policy rate at 1.25%, after having cut rates by 25 basis points in the previous two meetings.

The Central Bank held rates despite its expectation that inflation would remain below the lower bound of the inflation target range of 1.0%–4.0% (November: 0.2%) and that the economy will grow at a softer-than-previously estimated pace and below potential due to the weak external sector. Nonetheless, the Bank explained that “more accommodative monetary policy in the recent period would contribute to economic growth and support the rise of headline inflation toward the target” and consequently chose to wait and see the effects of its prior rate cuts before taking further action.

In the accompanying press statement, the Bank struck a similar tone compared to its previous meeting in November, restating its focus on monitoring developments relating to economic growth, inflation and financial stability. The Bank also reaffirmed its belief that the structural issues faced by the Thai economy “should be firmly addressed by all related parties”.

Looking ahead, the FocusEconomics Consensus Forecast sees the Bank of Thailand keeping the policy rate at its current level through 2020.

The next monetary policy meeting is scheduled for 5 February 2020.

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