Barnabas Gan, Economist at UOB Group, reviews the latest BoT meeting (February 9).

Key Takeaways

“The Bank of Thailand (BOT) kept its one-day repurchase rate unchanged at 0.50% for its 14th consecutive meeting on 9 Feb 2022. The last time it made a move was in May 2020, when the benchmark rate was cut by 25 bps.”

“While the central bank made no adjustment to its 2022 GDP outlook of 3.4%, the decision to keep the monetary policy accommodative was largely expected given the economic risks surrounding the (1) development of COVID-19 outbreak amid the (2) risk of higher global energy prices and cost pass through.”

“We expect BOT to inject a token 25 basis point rate hike in 2022, possibly as early as 3Q22, in response to higher inflation risk and the faster-than-anticipated FOMC rate hike for the year ahead. Notwithstanding the projected 25bps hike later this year, we continue to view the monetary policy stance of BOT to be accommodative, especially against the backdrop of potentially higher global interest rates.”