Economist at UOB Group Barnabas Gan reviewed the latest BoT event.
Key Quotes
“The Bank of Thailand (BOT) kept its one-day repurchase rate unchanged at 0.50% for the second consecutive meeting. The last time it made a move was in May when the benchmark rate was cut by 25 basis points. The decision to keep its policy rate unchanged was voted unanimously by all seven committee members.”
“The central bank reiterates its view for negative inflation in 2020, while keeping the outlook for GDP to contract by 8.1% in 2020. It added that a recovery to pre-COVID-19 levels will take at least two years.”
“Policy-makers continued to highlight their concern over the strengthening Thai Baht “which affects economic recovery”, suggesting that more accommodative measures may still be seen in the future to stem THB’s strength.”
“With rates approaching the zero mark, policy space is increasingly limited. Policy-makers may cut the benchmark rate by just another 25 basis points to 0.25% to support growth and inflation in the year ahead, failing which, unconventional measures such as asset purchases or yield curve control may be adopted.”
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