The Thai central bank is set to meet tomorrow for its interest rate decision. According to a DBS Bank research report, the Bank of Thailand is expected to stand pat tomorrow. In August, the central bank cut its interest rates by 25 basis points, unwinding December’s hike and taking the policy rate to within a striking distance from the global financial crisis low.
Sharp deceleration in the second quarter growth, along with THB outperformance has perturbed the BoT, in the midst of an already tough trade environment. The risk of missing the inflation target has also added to the cause of further easing.
“While policymakers might wait and monitor impact of last month’s cut and not move on rates immediately, we do scope for a cut in December. Thereafter, further cuts are unlikely in a hurry as the BOT seeks to balance the need for support with high household debt levels, constrained policy space and financial stability risks”, added DBS Bank.
