Bank of Thailand Keeps 1.5% Interest Rate

December 21, 2016

In deliberating their policy decision, the Committee assessed that the Thai economy would continue to expand at a pace close to the previous assessment, but downside risks increased. Inflation was still expected to slowly rise. Meanwhile, monetary conditions remained accommodative and conducive to the economic recovery. Hence, the Committee decided to keep the policy rate on hold at this meeting.

Today’s statement from Thailand’s Monetary Policy Committee¬†observes that the enhanced downside risks include possibly weaker-than-expected growth among major trading partners, “uncertainties in the direction of the US trade policies that would have significant implications for confidence and international trade” and fewer Chinese tourists than hoped. A restoration of in-target inflation is expected next quarter. The statement also observes that while the baht lost ground to the dollar since the prior review, it appreciated against several other Asian currencies. This could impede the trade balance.

The vote to retain a 1.5% policy rate was unanimous. The last changes were a pair of 25-basis point cuts in March and April of 2015. Previously, six other such reductions were implemented between November 2011 and March 2014.

Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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