Although the MPC voted 5-2 to maintain the policy rate at 2.50%, there is a possibility that the MPC may cut the policy rate 1-2 times in June and August 2024.

• The Monetary Policy Committee (MPC) on April 10, 2024 voted in a 5-2 non-unanimous decision to maintain the policy rate at 2.5%, unchanged from the previous meeting. Five members voted to maintain the policy rate at 2.50%, while two members voted to a 0.25% policy rate cut.
• The majority of the Committee deems that the current policy interest rate is conducive to safeguarding economic and financial stability, and that the monetary policy has limited effectiveness on resolving structural impediments that have resulted in low growth potential in the Thai economy. In addition, the MPC also signaled an emphasis on the stability of the financial system, including the Baht’s volatility.
• The MPC has lowered its forecast for the Thai economy in 2024 from the 3.2% forecast in November 2023 to 2.6%, while revising down the inflation projection for 2024 from the previous 2.0% to 0.6%.
• KResearch views that the future direction of monetary policy will continue to depend heavily on forthcoming economic data, inflation data and financial system stability while also monitoring the momentum of the fiscal stimulus measures that may affect the Thai economy for the rest of this year. However, there is still a possibility that the MPC will cut the policy rate at its meeting in June and August 2024.
• The Baht strengthened to THB36.3/USD on April 10 (meeting date), compared to THB36.7/USD on April 9, supported by the latest announced property stimulus measures and the MPC’s decision to maintain its policy rate.

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