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MNI STATE OF PLAY: Thai CB Waits For Tourism To Drive Recovery

MNI (Sydney)

sThailand’s central bank is looking to the re-opening of the tourist industry to revive the economy and is likely to tolerate rising inflation and continue its accommodative monetary policy at its meeting this week.

The Bank of Thailand is expected to maintain its one day repurchase rate at 0.50% on Wednesday, with the bank’s monetary policy committee meeting as the government prepares for discussions with China and Malaysia later this month on a travel bubble for international tourists, see: MNI STATE OF PLAY: Omicron Uncertainty Clouds Thai CB Outlook.


The emergence of the Omicron variant halted Thailand’s ‘Test and Go’ scheme for vaccinated tourist arrivals.

But the regime has been re-introduced and there are hopes that Thailand will receive eight million foreign visitors this year. Tourist numbers were at almost 40 million a year in 2019 and contributed just over 18% to national GDP before the pandemic hit in 2020.


The central bank is also likely to discuss the inflation outlook on Wednesday with January’s headline CPI surprising on the upside at 3.2%, higher than the BoT’s target range of 2% to 3%.

Concerns over growth, forecast at 3.9% for 2022, are likely to be prioritized over inflation at this stage in the recovery, although the inflation outlook could influence the bank over the longer term.


The next move in official Thai rates is expected to be up, but not until 2023.

The Thai baht, always a consideration for the central bank, has strengthened this year from around 33.6 to the USD to just under 33 this week. This is still weaker than a year ago, when the baht was under 29 against the USD.

The BoT, however, is unlikely to be moved by either inflation or the baht at this week’s meeting and is likely to maintain policy settings and wait for a domestic tourist led recovery, and for the global impact of any monetary tightening by developed market banks, particularly the Fed.

MNI Sydney Bureau | +61-405-322-399 |
MNI Sydney Bureau | +61-405-322-399 |

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