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BoT likely to leave benchmark policy rate unchanged with accommodative policy stance, says Scotiabank

The Bank of Thailand (BoT) is expected to leave the benchmark interest rate unchanged at its monetary policy meeting, scheduled to be held on November 14, with an accommodative monetary policy stance, according to the latest research report from Scotiabank.

The central bank’s real policy rate has turned slightly positive amid eased CPI inflation, providing the scope for the central bank staying on hold. As Thailand is a major export hub in the region, the THB remains susceptible to external uncertainties including the US-China tensions and the Fed’s tightening path.

PBoC adviser Ma Jun said on Monday that the downward pressure on the yuan may ease and he sees rising opportunities for constructive negotiations between China and the US to resolve their trade disputes. The US and China completed the second Diplomatic and Security Dialogue (D&SD) in Washington on November 9, paving the way for the Trump-Xi Summit set for December 1.

Thailand’s PM Prayuth Chan-o-cha has flagged February 24 through May as the window for holding the delayed general election next year. Last Thursday, Thailand government reiterated February 24, 2019, as the election date.

"In our opinion, a steady progress towards the election would prop up the THB should external uncertainties ease. We would like to sell USD/THB with a target of 32.6 and a stop of 33.4. The DXY Index is approaching to the overbought area with mounting risks of technical corrections," the report commented.

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