2017.05.2415:18:00UTC+00Bank of Thailand Likely to Maintain Policy Rate at 1.5 Pct Through 2017 - Anz

As was anticipated, the Bank of Thailand kept its policy rate on hold at 1.5 percent earlier today. All the seven members of the monetary policy committee unanimously voted to keep the rate unchanged. Thai economic activity has continued to rebound. Consistent with the recovery in external demand, exports and tourist arrivals kept their ascent. Private consumption has also increased, possibly due to higher incomes in the tradables sector and improved farm incomes.

But a more widespread recovery is still elusive. Private investment continued to shrink. The drop was seen in a slowdown in credit growth. Considering that capacity utilization rates continue to be weak, private investment is not expected to improve unless the export recovery is sustained, stated ANZ in a research report.

A supportive monetary policy would be required to maintain until a more widespread recovery in domestic demands is attained. Meanwhile, overall economic growth is driven by the rise in global demand. The momentum in domestic growth is not yet solid enough to pose upside risks to the inflation outlook.

“In an environment of improving but non-inflationary growth, we continue to expect the BoT to maintain its policy rate at 1.50 percent through 2017”, added ANZ.