Thailand: No change from the BoT – UOB

Economist at UOB Group Barnabas Gan comments on the latest BoT event.

Key Quotes

“The Bank of Thailand (BOT) kept its one-day repurchase rate unchanged at 0.50% as widely expected for the ninth consecutive meeting on 23 June 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.”

“The latest monetary policy statement kept its relatively bearish outlook, citing that ‘the Thai economic recovery would be slower and more uneven than the previous forecast due to the third wave of the COVID-19 outbreak’.”

“In view of the decline in tourism-led demand given the COVID-19 pandemic, BOT downgraded its 2021 GDP growth outlook to 1.8%, from its previous outlook of 3.0%.”

“The reopening of Thailand’s borders may inject marginal upside risks to our full-year GDP outlook of 1.5% in 2021.”

“Risks to Thailand’s economic outlook remain centred on COVID-19 developments.”

“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.”