Baht Extends Losses After BoT Stand Pat Despite Inflation Spike

Spot USD/THB has extended yesterday's sharp sell-off this morning in the wake of the Bank of Thailand's monetary policy decision, which saw policymakers stand pat despite ballooning inflationary pressure. The pair now changes hands -0.053 at THB33.245, lodging fresh two-week lows.

• The Bank of Thailand kept interest rates unchanged on Wednesday, in line with consensus forecast and expectations outlined in our preview. The MPC raised its 2022 inflation forecast to +4.9% Y/Y (up from +1.7% projected before and comfortably above the target range of +1.0%-3.0% Y/Y) citing the rise in oil and food prices, amplified by Russia's invasion of Ukraine. Despite expectations that inflation will breach target this year, the central bank said that price growth will likely ease by next year and thus policymakers will continue "to put emphasis on supporting the economic recovery."
• Bears look for sales past Mar 17 low of THB33.208, which would open up Mar 10 low of THB33.000. On the flip side, a rebound above Mar 28 high of THB33.802 would allow bulls to regain poise.
• Thailand's trade data & BoP current account balance will hit the wires later today, with S&P Global M'fing PMI & Business Sentiment Index coming up tomorrow.