Thailand: Inflation returns to target band – ANZ
Headline inflation in Thailand has come back to the Bank of Thailand’s target band after the institution announced a 25 bps rate cut yesterday. As economists at ANZ notes, the central bank could have more room for further rate cuts.
“Thailand’s headline inflation rose to 1.05% y/y in January, marking the first time it has returned to the central bank’s target band since May.”
“Core CPI rose 0.02% m/m in January. In y/y terms, it edged down to 0.47%, indicating subdued underlying price pressure.”
“We expect the BoT to adopt a wait-and-see stance following its 25bp rate cut yesterday, but acknowledge that a further rate cut cannot be ruled out, especially if the virus spread is prolonged and fiscal policy continues to be handicapped by legal bottlenecks.”
“BoT governor Veerathai Santiprabhob today commented that yesterday’s cut was a necessary pre-emptive move and that the central bank still has policy space left to respond to unexpected events.”