Thailand: BoT keeps rates unchanged

UOB Group’s Economist Barnabas Gan reviews the latest monetary policy meeting by the Bank of Thailand (BoT).

Key Quotes

“The Bank of Thailand (BOT) kept its one-day repurchase rate unchanged at 0.50% as widely expected for the eighth consecutive meeting on 05 May 2021. The last time it made a move was in May 2020, when the benchmark rate was cut by 25 bps. The decision to keep its policy rate unchanged was voted unanimously by all committee members.”

“Policy-makers kept its negative tone in the latest monetary policy statement, in light of the recent spike in COVID-19 infections, citing that ‘economic growth is likely to sharply slow due to the third COVID-19 wave’.”

“As expected, BOT sees downside risks to its current GDP growth outlook at 3.0% in 2021. As such, growth is expected to slow to a range of between 1.0% and 2.0% in 2021. For 2022, BOT adjusted its growth outlook to a range of between 1.1% and 4.7%.”

“The economic momentum in 2021 will depend on the pace of vaccination rollout in Thailand, which in turn will impact tourism demand.”

“We continue to observe that policy space remains very limited, while fiscal policies will likely do the heavy lifting in supporting economic growth. In all, we keep our call for BoT to leave its benchmark rate unchanged at 0.50% for the whole of 2021. Still, Thailand’s economic growth is likely to be uneven, amid pronounced downside risks should COVID-19 worsens. Should macroeconomic fundamentals stay unexpectedly subdued into 2H21, a 25 bps rate cut could materialise then.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.