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Thailand Faces 8 Straight Mths of Deflation/ Floods, Fueling Forecast of Mid-Dec Rate Cut by BOT
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The Thai Commerce Ministry announced that Thailand's CPI for November fell by 0.49% YoY, less than the market's expected decline of 0.6%, representing a decline for 8 consecutive months, with inflation far below the Bank of Thailand (BOT)'s target range of 1-3%, compared to a previous value of a 0.76% fall. The CPI also rose by 0.15% MoM, beating forecast. Excluding volatile items such as food and energy, Thailand's core inflation picked up by 0.66% YoY in November. Thailand continued to experience deflation, compounded by the most severe floods on record in its southern region, resulting in nearly 200 deaths and estimated economic losses of THB500 billion (approx. US$15.7 billion). Ongoing deflation and the weak economy before the floods will increase the likelihood of a rate cut at the December monetary policy meeting, Tim Leelahaphan, a Thailand-based economist at Stanchart, said. The strong THB amid weak fundamentals also adds pressure for a rate cut. USD/ THB inched up 0.2% during the Asian session, and fell to 31.9070. AASTOCKS Financial News Website: www.aastocks.com |
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