BofA Securities: The Bank of Thailand will ignore supply-side inflation shocks and keep interest rates unchanged until 2027
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(1) Economists at BofA Securities stated in a report that the Bank of Thailand is unlikely to raise interest rates soon. They expect the overall inflation rate to peak at around 5% by the end of 2026, then decline as the energy base effect fades. (2) Market prices have already reflected expectations of two rate hikes this year, but BofA believes the Bank of Thailand will overlook supply-side inflation shocks. The economists pointed out: "Raising interest rates in the context of an oil shock that monetary policy cannot address is likely a policy mistake." (3) BofA expects the Bank of Thailand to maintain its policy rate at 1.00% until the end of 2026 and for most of 2027.
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