Thailand: BoT delivers a negative tone at its meeting – UOB

Economist at UOB Group Barnabas Gan assesses the latest Bank of Thailand (BoT) monetary policy meeting.

Key Quotes

“The Bank of Thailand (BOT) kept its one-day repurchase rate unchanged at 0.50% as widely expected for the seventh consecutive meeting on 24 March 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.”

“While keeping its benchmark rate unchanged, the monetary policy statement adopted a seemingly more negative tone as compared to the previous February statement.”

“Moreover, the Bank of Thailand downgraded its GDP growth outlook to 3.0% in 2021, and 4.7% in 2022, from a previous growth outlook (last reviewed in December) of 3.2% and 4.8% in 2021 and 2022, respectively.”

“In all, we keep our call for BOT to leave its benchmark rate unchanged at 0.50% for the whole of 2021. Still, Thailand’s economic growth is likely to be uneven, amid pronounced downside risks should COVID-19 worsens. Should macroeconomic fundamentals stay unexpectedly subdued into 2H21, a 25 bps rate cut could materialise then.”