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Thailand's central bank is expected to cut its domestic growth forecast for the second time this year as a resurgence of the virus impacts the economy but leave its policy rate unchanged at the record low of 0.50% as any cut could further weaken the baht.
Current forecasts are for 3% GDP growth this year and 4.7% next year. BOT officials confirmed last weekend that a downgrade was likely with the covid-19 infections continuing to keep tourists away.
Any action to address the weakening economy could be stymied as the downturn coincides with a reversal in the baht's direction -- the currency has fallen more than 4% so far this year after climbing 5.8% against the dollar in Q4 2020. One of the BOT's mandates is to guard against FX volatility.
The central bank has looked to other measures to stimulate the economy and soften the impact of the pandemic, purchasing government bonds directly at the height of the crisis last year and creating a USD12 billion corporate bond stabilization fund.
There have also been suggestions of a potential asset warehouse where commercial banks can freeze non-performing assets from the hard hit tourism sector but an announcement is yet to be made, with only an outside chance any announcement could come at Wednesday's meeting.