Krungsri expects the MPC to maintain interest rates at 0.5% for a long time, supporting the economy to recover to high inflation
Date 31 Mar 2022 time 07:24
Krungsri expects the MPC to unanimously hold the policy rate at 0.50% to support the economy recover from the war. Even if inflation rises, you have to agree.
Global Markets Group Bank of Ayudhya Public Company Limited revealed the results of the Monetary Policy Committee (MPC) meeting this afternoon. The Bank of Thailand (BOT) passed a resolution unanimously. to maintain the policy rate at 0.50%, which is the 15th interest rate stabilization
The MPC estimates that the Thai economy will continue to expand by 3.2% in 2022 and 4.4% in 2023. This downgrading of the forecast shows that the Russian sanctions will have an impact on the Thai economy through a hike in the economy. The slowdown in product prices and foreign demand Headline inflation will rise above the target range by 1-3% before falling back to the target range in early 2023. Headline inflation in 2022 is expected to be 4.9% and 1.7% this year. 2023, respectively, with inflation expected to rise above 5 percent in the second and third quarters of 2022. The MPC statement estimated that the higher inflation rate was a result of cost- push inflation, while demand-pull inflation remains low. Maintaining the policy interest rate at 0.50% is appropriate for the situation.
Due to the MPC’s statement that went as expected The baht remained stable at 33.33 baht/dollar. The baht showed little change from the end of 2021, but depreciated in March. compared to February As a result of rising oil prices and anticipation of a reduction in liquidity from the Fed’s system, the MPC should closely monitor the developments of global and Thai financial markets.
Board of Directors The next meeting is scheduled for June 8, 2022. Statements from this meeting emphasize Krungsri’s view that Despite external pressure on interest rate hikes, the MPC reiterated its original position on the policy interest rate. Krungsri views that any adjustment will depend on concrete signs of a recovery in the tourism sector. Targeted fiscal measures are even more important. The main factors affecting the economy and overall inflation include global energy and commodity prices. increased transmission costs and geopolitical problems that may cause increased tension Krungsri is of the opinion that adding the word The “inflation overview” in the MPC statement shows concern over the risks of both economic growth and inflation going forward. But in the near future, we will continue to focus on the policy interest rate fixation.
