Bank of Thailand Keeps Accommodative Policy Stance

August 6, 2014

Thailand’s Monetary Policy Committee sets interest rate policy.  The benchmark interest rate has been at 2.0% since a 25-basis point cut announced on March 12 and decided by a thin vote of 4-3.  That easing culminated six such moves, the first five of which were engineered in November 2011, January and November 2012, May 2013 and November 2013.  Earlier, the interest rate was cut during the Great Recession period from a high of 3.75% to a low of 1.25%, then raised by 225 basis points in increments also of 25 basis points between July 2010 and August 20111 to a high of 3.5%.  The committee met today for the third time since the March 12 cut.  Like the previous June 18 meeting, officials decided unanimously to keep the rate at 2.0% and in a released statement judged the current stance to be “accommodative” but “appropriate.”  In other respects, this new statement conveys greater satisfaction with the present course than did the June statement.  Inflation pressure now is said to ” remain contained,” compared to a comment in June that “inflationary pressure has edged higher.”  The June statement attributed a contraction of GDP in 1Q to domestic “political uncertainties,” while today’s communique speaks of a “political resolution,” modest recovery in exports, and expectations for stronger domestic demand in the second half, especially from public investment.  The next policy announcement will arrive on September 17.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



Comments are closed.