Thailand Monetary Policy

November 28, 2012

From a high of 3.5% (August 2011 – November 2011), Thai monetary officials had implemented three 25-basis point cuts in the one-day repo rate.  These were administered in November 2011, January 2011 and, most recently, at the prior monthly meeting in October by a 5-2 vote.  At this month’s meeting, in contrast, the authorities decided unanimously to key the key central bank rate at 2.75%, declaring in a statement that “as downside risks to growth subsided with  inflationary pressure in check, the current policy rate remained accommodative and conducive to growth.”   The statement observes that “the global impact has so far remained limited only 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. Going forward, exports were projected to recover in the first half of 2013.”  From the comfortable tone of these remarks, it appears that Thai monetary officials are prepared to let sufficient time to pass while monitoring whether economic trends abroad and at home evolve as they now assume before changing policy again.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission. 



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