Thailand: BOT keeps one-day repurchase rate on hold
June 18, 2014
At its 18 June monetary policy meeting, the Bank of Thailand (BoT) decided to maintain the one-day repurchase rate at 2.00%. The decision was on par with market expectations. The one-day repurchase rate currently sits at its lowest level in three years.
According to the Bank, the economy contracted in the first quarter as political uncertainty weighted on domestic demand. The slow recovery in tourism and exports of goods may have a negative impact on growth going forward. However, the pressure on the BoT to cut its one-day repurchase rate was reduced as the military government, which took over the country on 22 May, is set to implement reforms that will boost growth. The Bank went on to say that, “the economic recovery should pick up pace given reduced political uncertainties and a resumption of functioning public policy management. Regarding price developments, it stated that “inflationary pressure has edged higher.”
The members of the MPC unanimously took the decision to keep the one-day repurchase rate unchanged. The next monetary policy meeting is scheduled for 6 August.
Author: Dirina Mançellari, Senior Economist