Post by account_disabled on Jan 2, 2024 20:39:27 GMT -8
Dr. Amornthep Chawala, Executive Vice President, Research Office, CIMB Thai Bank, revealed that this time the MPC reduced interest rates from 1.75% to 1.50%, which was considered above expectations as the reduction was faster than expected. Previously, we thought that the MPC would cut interest rates but it would likely be at the end of the year. But this time it decreased faster than expected. and there was no previous transmission. In the past, before the Bank of Thailand did anything, it was often seen that there was a split in the MPC.
For example, from the 7-0 resolution maintaining C Level Executive List interest in the previous meeting. The results should have been issued with a resolution of 6-1 or 5-2 first, but there was a reduction in interest rates this time. The reason being that it comes from greater risk. and from the slowing economy As for the reason for the interest rate reduction, there are 3 main reasons. Previously it was said that The National Bank is highly tolerant in 3 areas. Today, the National Bank is likely to be less tolerant in 3 areas or no longer tolerant: 1. Cannot tolerate an economy that is slowing down less than expected. The latest numbers are from June when the monthly economic report is released. This reflects the picture that the economy has slowed from the export sector and is spreading to the domestic sector. and believes that the economy in the second quarter will grow lower than previously estimated.
We think it will grow by 2.5%, but how low it will be remains to be seen. The next thing to look at is that we think the economy will slow in the first half. It is a temporary factor that Should recover in the second half. But after the trade war became more intense. After President Trump raised tariffs on China on 300 billion worth of imported products, another 10% should reflect that the future economy is not good. This should be a turning point where the Bank of Thailand is no longer able to tolerate a slowdown in the economy. Exports are expected to continue to deteriorate and spread to the economy in Thailand. 2. The National Bank cannot tolerate low inflation. Because last month's inflation fell out of the lower bound of 1% again and we continue to look forward to lower energy prices. Then it spread to domestic demand that seemed to slow down. Your own purchasing power may not be much.
For example, from the 7-0 resolution maintaining C Level Executive List interest in the previous meeting. The results should have been issued with a resolution of 6-1 or 5-2 first, but there was a reduction in interest rates this time. The reason being that it comes from greater risk. and from the slowing economy As for the reason for the interest rate reduction, there are 3 main reasons. Previously it was said that The National Bank is highly tolerant in 3 areas. Today, the National Bank is likely to be less tolerant in 3 areas or no longer tolerant: 1. Cannot tolerate an economy that is slowing down less than expected. The latest numbers are from June when the monthly economic report is released. This reflects the picture that the economy has slowed from the export sector and is spreading to the domestic sector. and believes that the economy in the second quarter will grow lower than previously estimated.
We think it will grow by 2.5%, but how low it will be remains to be seen. The next thing to look at is that we think the economy will slow in the first half. It is a temporary factor that Should recover in the second half. But after the trade war became more intense. After President Trump raised tariffs on China on 300 billion worth of imported products, another 10% should reflect that the future economy is not good. This should be a turning point where the Bank of Thailand is no longer able to tolerate a slowdown in the economy. Exports are expected to continue to deteriorate and spread to the economy in Thailand. 2. The National Bank cannot tolerate low inflation. Because last month's inflation fell out of the lower bound of 1% again and we continue to look forward to lower energy prices. Then it spread to domestic demand that seemed to slow down. Your own purchasing power may not be much.