MNI BoT Preview - April 2024: Likely To Ignore Political Pressure To Ease

EXECUTIVE SUMMARY:

• The Bank of Thailand (BoT) is set to ignore government calls again to cut rates to support lacklustre growth and keep rates at 2.5%. The consensus also looks for no change in the policy rate, although several forecasters are looking for a 25bps cut, per the Bloomberg survey.
• The Bank of Thailand is on hold for now as it sees deflation as a result of factors it can’t control and lacklustre growth due to structural weaknesses. Like other central banks in the region, it is unlikely to shift until the Fed has eased so as not to pressure the currency and increase import prices. There have already been two votes for a rate cut though and there is considerable political pressure for monetary policy to support the economy. PM Srettha called for an unscheduled meeting in order for rates to be cut. For now, BoT is withstanding the pressure.
• While five MPC members voted to leave policy unchanged in February, two voted to ease and so the split in April will be monitored closely for any further calls to cut rates. While cuts are not likely until H2, an increase in support for them on the MPC would likely bring easing forward.

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BoT Preview - April 2024.pdf