BoT Optimistic On 2H Growth, Keeps Rate Unchanged

Economic Research	25 May 2017
Thailand
Economic Update
BoT Optimistic On 2H Growth, Keeps Rate Unchanged BoT’s MPC expressed optimism for merchandise exports and private consumption to pick up in 2H. Thus, the committee voted to keep its benchmark lending rate (1-day bilateral repurchase rate) unchanged at 1.5%. The decision was unanimous. Financial stability remained sound with sufficient cushion against economic and financial volatilities, especially from the external front. Domestically, the MPC highlighted two key risks that warranted close monitoring:     i.   Deterioration in debt serviceability of small and medium sized enterprises (SMEs);    ii.   Excessive search-for-yield behaviour in the prolonged low interest environment. This may lead to the under-pricing of risks, which could unravel amid a faster-than-expected US interest rate hike. Economist:  Ng Kee Chou  | +603 9280 2179