The Bank of Thailand's Monetary Policy Committee (MPC) unanimously resolved to keep their key policy rate static at 3.00%, as expected by the market. Their decision at the meeting held on May 2, 2012 follows the release of the Ministry of Commerce's inflation data, showing that Headline Inflation and Core Inflation were much lower-than-expected in April. Headline Inflation dropped to 2.47 percent YoY, down from 3.45 YoY percent in March. Core Inflation declined to 2.13 percent, against 2.77 percent YoY in March.
Looking ahead, we at KResearch maintain our existing view that inflationary pressure may ease in the near-term, thus allowing the BOT leeway to assess economic developments. However, inflation should rise in 2H12, as a result of cost transfers undertaken by producers, plus the effect of economic recovery. Headline Inflation will probablyrise above 4 percent in 2H12, and Core Inflation should increase close to the upper limit of the BOT's inflation-targeting framework, currently set at 0.5-3.00 percent.
If the Dubai crude oil price remains within our estimated limits of USD112-122 per barrel and the Eurozone debt crisis does not worsen, we maintain our 2012 projection that Headline Inflation will stand at 3.9 percent and Core Inflation at 3.0 percent. Although the BOT key policy rate is currently forecast to remain at 3.00 percent until the end of the year, upside inflationary pressure during 2H12 will increase the possibility that authorities may signal tighter monetary policy later in the year, or early in 2013.
Enter the code from the poll
Annotation
This research paper is published for general public. It is made up of various sources. Trustworthy, but the company can not authenticate. reliability The information may be changed at any time without prior notice. Data users need to be careful about the use of information. The Company will not be liable to any user or person for any damages arising from such use. The information in this report does not constitute an offer. Or advice on business decisions Anyhow.