BOT Expected to Raise Rates Amid Higher Tourism Growth

[snoop1130]

 

BANGKOK (NNT) - The Bank of Thailand (BOT) is expected to raise interest rates by 25 basis points on Wednesday (25 Jan) to curb elevated inflation, with further hikes likely even as China’s reopening brightens the economic outlook.

 

While price pressures in Southeast Asia’s second-largest economy have been cooling, inflation in December was still 5.89% – well above the central bank’s 1-3% target.

 

21 of 23 economists polled by Reuters expect the BOT to raise its benchmark one-day repurchase rate by 25 basis points (bps) to 1.50% on January 25. The remaining two forecast no change.

 

Thailand, one of Asia’s most popular tourist destinations, is expected to receive at least 5 million Chinese tourists and a total of 25 million foreign visitors this year, providing a much needed boost to an economy severely impacted by the global pandemic.

 

The poll showed Thailand’s economy is expected to expand 3.7-3.8% this year and next, respectively, in line with government projections.

 

Nearly 70% of respondents, or 15 of 22, expect another hike of 25 basis points to 1.75% by end-March. Six forecast rates at 1.5% by then, and one said it would still be at 1.25%.

 

The poll median showed that the central bank would then raise borrowing costs by another 25 bps, taking it to 2% by end-September.

 

Poll medians showed inflation would average 2.8% this year and then fall to 1.9% in 2024.

 

Source: https://thainews.prd.go.th/en/news/detail/TCATG230123114847621

 

-- © Copyright NNT 2023-01-23

 

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[ThailandRyan]

This will strengthen the Baht I do believe. As indicated by Kasikorn Bank the baht will be back atv32 per 1 USD soon. Today it is at 32.75 per 1 USD. Glad I transferred when it was in tge 37 - 38 range.

[nigelforbes]

2 minutes ago, ThailandRyan said:

This will strengthen the Baht I do believe. As indicated by Kasikorn Bank the baht will be back atv32 per 1 USD soon. Today it is at 32.75 per 1 USD. Glad I transferred when it was in tge 37 - 38 range.

I will be surprised if it does, I think the increase is already built in because it has been well advertised for a long time.

 

That said, I also agree that USD/THB will strengthen to 32 although not as a direct cause of the rate increase. USD continues to weaken, the DI is already down to 102%. The Baht would see 32 regardless of what the BOT does at this stage....I think.