MPC meeting, July 21, 2024: Decision to maintain the policy rate may be non-unanimous, while the rate cut is more likely during the remainder of 2024 (Business Brief No.4078 Full Ed.)

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It is expected that the Monetary Policy Committee (MPC) will have a non-unanimous decision to maintain the policy rate at 2.50 percent during the upcoming meeting slated for July 21, 2024. This is because the MPC already signaled at the previous meeting that the current interest rate is consistent with the improvements seen in economic and inflation outlook, while the monetary policy has limited effectiveness in addressing structural issues that have caused the Thai economy to grow below its potential.
We at KResearch continue to assess that the MPC will hold the policy interest rate at 2.50 percent for the rest of 2024. However, it is more likely that the MPC will cut the policy interest rate once in 4Q24, because the US Federal Reserve (Fed) may make more rate cuts than previously anticipated, and the fact that the Thai economy will likely recover at a slower rate while inflationary pressures may remain low.

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