AWS Expects MPC to Maintain Policy Rate with Implementations to Support Economic Recovery

Asia Wealth Securities (AWS) expected the Monetary Policy Committee (MPC) meeting today (4 August), the policy interest rate is set at 0.5% and continues to implement an accommodative monetary policy to support economic recovery, including the risk of capital outflow due to the Fed’s signal to withdraw monetary policy faster than expected.

Meanwhile, the Thai economy still has a chance to recover more slowly than the large economies. However, the risk of the spread of the COVID-19 virus which in the past 2 weeks still has increased rapidly affects the manufacturing, employment and business sectors, including domestic purchasing power. This was reflected in the Consumer Confidence Index, the production index, which decreased as a result of the renewal of measures to enhance epidemic control.

The uncertain outlook of the Thai economy may give the Bank of Thailand an opportunity to cut interest rates, contrary to the trend of global interest rates which will be a factor stimulating capital outflows and the baht depreciated.