Faced with a sluggish economy, the Bank of Thailand will likely cut interest rates to a historic low of 1.25 percent later this year from 1.5 percent currently, Credit Suisse said.
But monetary easing alone may be insufficient to deal with the drought consequences, according to ANZ. In addition to easing, it believes the Bank of Thailand will also allow the baht to weaken.
Citi's Trinidad agreed: "A bias for a weak baht will persist, which can improve farm export earnings despite lackluster volumes and thus support rural consumption.