Thailand: Bank of Thailand keeps interest rate on hold
November 28, 2012
At its 28 November monetary policy meeting, the last meeting scheduled for 2012, the Bank of Thailand (BoT) maintained the one-day repurchase rate unchanged at 2.75%, a decision that was widely expected by the market. The decision follows an unexpected 25 basis-point cut in the policy rate in the previous meeting. In its accompanying statement, monetary authorities argued that economic growth continues its positive momentum and that the impact of slowing global economic activity "has so far remained limited to export-related sectors, while the greater-than-expected strength in domestic demand appeared to provide sufficient cushion against the adverse impact of export slowdown". Monetary officials predict that exports will recover in the first half of 2013, buttressed by improving conditions in the global economy. Meanwhile, private consumption and investment should continue to support growth going forward. As inflationary pressures remain contained and downside risks to growth have subsided, the BoT recognised that "the current policy rate remained accommodative and conductive to growth." The next monetary policy meeting is scheduled for 9 January.
Author: Ricardo Aceves, Senior Economist