Thailand inflation softer than expected

The BOT however is not likely to further cut its interest rate.

OCBC Treasury Research noted:

Despite inflation coming in softer than expected, we don’t expect the BOT to further cut its interest rate for the rest of the year, as the central bank is likely to sustain an underlying strong stance on inflationary pressures going forward.

As discussed previously, we think that inflation has bottomed out in Thailand and the trend going forward should be biased towards the upside. Core inflation should return to the 2.5-3 percent territory next year, making it highly likely that the central bank will not trigger any more rate cuts in the coming sessions.

Indeed, in 2013, we look for the BOT to unwind the string of rate cuts it has delivered so far this year.