The Bank of Thailand (BOT) left its 1-day repo rate on hold at 1.25% today, against our and consensus expectations for a 25bps cut. The weakness of domestic demand and the spectre of sustained deflation warrant further easing of monetary policy in our view, but rates now look set to remain on hold for the remainder of the year. The focus of the BOT will likely turn to easing the flow of credit to business.
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