Thailand: Bank of Thailand keeps rates unchanged
August 21, 2013
At its 21 August monetary policy meeting, the Bank of Thailand (BoT) maintained the one-day repurchase rate at 2.50%. The decision marks the second consecutive meeting in which the BoT kept rates on hold after the expected 25 basis-point cut in May.
According to the BoT, the global economy is showing signs of gradual recovery. The US economy in particular is improving due to an expansion in the manufacturing and housing sectors. On the other hand, slower growth in China and in the rest of the Asian economies is delaying recovery in Thailand's exports. The Thai economy entered a technical recession in Q2, reflecting a decline in private consumption and fixed investment. However, the Central Bank expects both domestic demand and external sector to recover gradually, but with some risks of delay.
The decision to keep the rate unchanged was not unanimous; one of the members of the Monetary Policy Committee (MPC) voted in favor of a 0.25% rate cut to support the continuity of growth next year.
FocusEconomics Consensus Forecast panellists expect the one-day repurchase rate to end 2013 at 2.92%. In 2014, the panel expects the monetary policy rate to end the year at 3.20%.
Author: Dirina Mançellari, Senior Economist