Thailand's monetary policy under Veerathai unlikely to depart from recent course

Veerathai Santiprabhob has been chosen as the next governor of the Bank of Thailand today. Barclays expects, the monetary policy under Veerathai is unlikely to depart from the recent course charted by the BoT. While growth and inflation remain soft, the MPC appears comfortable with its current policy stance following the two back-to-back rate cuts in March and April. That said, the risk remains tilted towards further accommodation, acording to barclays. 

One trigger for this would be a renewed strengthening in the THB, which continues to see support from a sharply widening current account surplus and has become a key policy focus of late. A further trigger could be an additional material weakening in domestic demand conditions. 

"Our base case is that the sluggish pace of the recovery will continue, but that the risk of further near-term easing has diminished given the recent stability in the THB", added Barclays.