Thailand’s headline CPI inflation remained low in July at 0.4% y/y from 0.2% and lower than expected, which has put upward pressure on USDTHB reaching 34.75. Underlying inflation was in line with expectations at 0.9% y/y but lower than June’s 1.3%. The Bank of Thailand sounded less hawkish following its August 2 rate hike to 2.25% and these data and growth uncertainties suggest that that may be the peak. While the BoT still sees upside risks to inflation, it expects it to remain in the 1-3% target band. Also the risks are now stemming from the impact of El-Nino on food prices rather than from increased demand.

• The Commerce Ministry said that there was downward pressure on inflation from lower food and fuel prices and base effects. The latter is likely to keep annual inflation rates low and the ministry expects it to remain below 1% over the rest of 2023.

Source: MNI - Market News/Refinitiv