The Committee voted unanimously to maintain the policy rate at 1.75 percent assessing that the Thai economy would expand around its potential despite at a slower pace than previously assessed due to a slowdown in external demand.
Nevertheless, domestic demand would continue to gain traction. Headline inflation projection was in line with the previous forecast, while core inflation would be slightly lower than previously assessed.
The BoT now forecasts 2019 economic growth of 3.8%, rather than 4.0% three months ago.
Slower exports growth
Meanwhile, merchandise exports grew at a slower pace than previously assessed due to the global economic slowdown, a down cycle of electronic products as well as impacts from trade protectionism measures between the US and China.
Overall financial conditions remained accommodative and conducive to economic growth. However, there were risks to financial stability in the future that warranted continued monitoring.
The Committee viewed that the current accommodative monetary policy stance had contributed to the continuation of economic growth and was appropriate given the inflation target.
In addition, given heightened global and domestic uncertainties in the current period, the Committee thus voted to keep the policy rate unchanged at this meeting to assess the clarity of impacts from such uncertainties
BOT relaxes rules to Curb Strong Baht
the Bank of Thailand (BOT) decided to relax regulations to facilitate capital outflows to help promote capital flow balance and lessen pressure on the baht.
The Thai baht has been under pressure due to imbalanced capital flows in the current environment of highly uncertain and volatile external conditions, the Ministry of Finance (MOF) and the Bank of Thailand (BOT) decided to relax regulations to facilitate capital outflows to help promote capital flow balance and lessen pressure on the baht.(more…)
Bank of Thailand cuts rate by 0.25% to 1.25 per cent
The latest cut brings the Bot’s policy rate to an historical low, which the bank maintained from April 2009 to July 2010 during the subprime global financial crisis.
On 6 November 2019, the MPC voted 5 to 2 to reduce the policy rate by 0.25 percentage point from 1.50 to 1.25 percent, effective immediately. Two members voted to maintain the policy rate at 1.50 percent.(more…)
Thailand’s loss of trade privileges with US is credit negative
The development is credit negative because Thailand’s export-oriented economy is in a difficult external environment given that a broad-based export slowdown and strong Thai baht are weakening the competitiveness of goods exporters and the country’s tourism industry.
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