Thailand: Bank of Thailand stays put for third consecutive month
February 20, 2013
At its 20 February monetary policy meeting, the Bank of Thailand (BoT) kept the one-day repurchase rate unchanged at 2.75%, in a decision broadly expected by the market. The decision marks the third consecutive month in which the Bank keeps rates on hold after an unexpected 25 basis-point cut in November.
The BoT argued that "the accommodative monetary policy stance contributed to sustained growth of the economy, while inflation has been kept within the target range." The economy grew more than expected in the last quarter of 2012 and the positive momentum is expected to remain in place going forward, amid strong domestic demand and a recovery in exports.
According to the BoT, however, the decision was not unanimous and one of the members of the Monetary Policy Committee (MPC) voted in favour of a 0.25% rate cut, amid downside risks "stemming from volatile capital" flowing towards higher yields.
Author: Ricardo Aceves, Senior Economist