Further rate cuts from BoT look unlikely in 2016

Bank of Thailand left its policy rate unchanged at 1.50% as expected. The central bank dropped the phrase "sufficiently accommodative" to describe its monetary stance, calling it just "accommodative".  This change could mean that further rate cut from the central bank are unlikely, but it is definitely not ruling such action out in future meetings, if needed.

The central bank maintained a dovish tone despite the growth recovery remaining close to its assessment. The statement continues to flag that the Thai economy remains in the midst of a moderate recovery. BoT believes demand-side inflation will continue to support core inflation and keep deflationary risks contained.

"In our view, today's on-hold decision masks a more dovish bias on the MPC, which indicates that concerns around the sustainability of growth recovery have likely risen at the margin. We believe the BoT may also be assessing the effects of the recent government measures to boost growth, as announced fiscal spending has been raised for Q1." said Barclays in a report.