Following an unexpected rate reduction by the Bank of Thailand on Wednesday, CIMB analysts have revised their projections for the central bank. Their current forecast anticipates the BOT maintaining rates in December and implementing an additional 25 basis point cut by the conclusion of the first half of 2025.
In their assessment, CIMB analysts Chew Khai Yen and Michelle Chia highlighted that the BOT’s recent statement did not express apprehensions regarding growth, inflation, or the exchange rate.
Despite the rate adjustment, the central bank’s stance on the Thai economy remains largely consistent, emphasizing the suitability of a neutral policy stance. The analysts noted that the BOT’s perspective remains unchanged, with no significant alterations to its outlook.
CIMB identifies certain factors that could potentially influence their perspective and trigger an earlier rate reduction. These include sluggish third-quarter growth and the trajectory of oil prices throughout 2025, particularly if they persist beneath the BOT’s projected $80 per barrel.
However, the central bank noted that the decision for a rate cut on Wednesday was not pressured by the government and this is not a part of the easing cycle.
