The Bank of Thailand’s (BoT) Monetary Policy Committee will convene today to update its interest rates, which will likely remain
The Bank of Thailand’s (BoT) Monetary Policy Committee will convene today to update its interest rates, which will likely remain unchanged.
The BoT has left its overnight rate at an all-time low of 0.5% since its May meeting as it continues to monitor the country’s recovery and save what little ammunition it has left in setting rates. A swift recovery for the tourism-dependent economy is widely seen as tied to the reduction of travel restrictions for international visitors. The government is cautiously loosening these restrictions with the introduction of a long-term special tourist visa set to be issued next month. However, the mandatory 14-day quarantine and quota on the number of visas issued will likely stunt the prospect of a swift return of foreign tourists.
In the short-term, expect the BoT to maintain its conservative policy position as the incoming governor, who will assume his post on October 1, has vowed to largely continue the work of his predecessor. Outgoing Governor Veerathai Santiprabhob has pointed to various restructuring efforts—such as reforming the tax code, generating higher returns on government assets and further developing the country’s digital infrastructure—as ways to reduce the government deficit while a long-term recovery takes place.
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