Potential Cut
“The main scenario remains for the Bank of Thailand to keep rates unchanged, although there’s some speculation of a potential rate cut,” said Toru Nishihama, an economist covering emerging markets at Dai-ichi Life Research Institute Inc. in Tokyo. He expects the key rate to remain unchanged for some time, and forecasts 0.4 percent expansion for the Thai economy this year.
“With lower oil prices and sluggish domestic demand, CPI gains may stay low for some time, while the domestic economy has been stagnant,” Nishihama said.
The bank’s Monetary Policy Committee “expresses concerns regarding greater downside risks from global growth and the timeliness of public investment spending,” Assistant Governor Mathee Supapongse said at a media briefing. One committee member argued for a 25 basis-point rate cut “to reinforce the momentum of economic recovery,” Mathee said.