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BoT Still Not Set on August Lift Off?

THAILAND
BulletEM BulletEmerging Markets

BoT Assistant Governor Piti Disyata appeared to push back against expectations of an imminent rate rise during a Bloomberg interview. The BoT official stated the central bank wants to normalise policy in a gradual manner, as the economic recovery is just beginning. It was added that the trade-off between moving too early and too late on rates is a narrow one they are attempting to steer.

  • This looks a little less hawkish than comments from the BoT Governor recently, which emphasized the need to tighten soon, to avoid larger increases later on.
  • In today's interview, the BoT Assistant Governor also stated it was important higher inflation doesn't get embedded in the system and that baht depreciation doesn't add to inflationary pressures.
  • The baht has continued to depreciate today, losing a further 0.5% to 36.00 in USD/THB terms.
  • Recall yesterday, June inflation in Thailand rose to 7.66% YoY, above expectations and versus 7.1% in May. Core inflation was also firmer than expected but is still coming from a low base at 2.51% YoY.
  • Note the next BoT meeting is not until the 10th of August, so this is unlikely to be the last we hear on the outlook from officials.
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BoT Assistant Governor Piti Disyata appeared to push back against expectations of an imminent rate rise during a Bloomberg interview. The BoT official stated the central bank wants to normalise policy in a gradual manner, as the economic recovery is just beginning. It was added that the trade-off between moving too early and too late on rates is a narrow one they are attempting to steer.

  • This looks a little less hawkish than comments from the BoT Governor recently, which emphasized the need to tighten soon, to avoid larger increases later on.
  • In today's interview, the BoT Assistant Governor also stated it was important higher inflation doesn't get embedded in the system and that baht depreciation doesn't add to inflationary pressures.
  • The baht has continued to depreciate today, losing a further 0.5% to 36.00 in USD/THB terms.
  • Recall yesterday, June inflation in Thailand rose to 7.66% YoY, above expectations and versus 7.1% in May. Core inflation was also firmer than expected but is still coming from a low base at 2.51% YoY.
  • Note the next BoT meeting is not until the 10th of August, so this is unlikely to be the last we hear on the outlook from officials.