Bangkok, Krungthai COMPASS expects that the MPC has not yet adjusted the direction of monetary policy in the near term. Because the economy is still likely to expand, SCB EIC has confirmed that the MPC will not reduce interest rates in 2024. From the resolution of the Monetary Policy Committee (MPC) yesterday (7 February 2024), there was a 5-2 vote to maintain the policy interest rate at 0.25 percent per year, evaluating that the Thai economy is likely to expand at a slower pace. than expected, which in 2024 is estimated to grow in the range of 2.5-3.0 percent. General inflation is likely to be lower than originally thought. It noted that the current low inflation rate does not indicate weak demand. It is expected that general inflation in 2024 is likely to remain low, close to 1 percent. Krungthai COMPASS Krungthai Bank views that the MPC has signaled a more relaxed attitude. However, it is estimated that there will be no adjustment in the direction of monetary policy in the near term. This is because the economy is still in the direction of expansion and the MPC needs to wait for clarity in various information going forward. While there are risks that may pressure inflation to accelerate in the future. In addition, it is necessary to follow the adjustment of monetary policy direction of main central banks abroad. 'It is estimated that the MPC will not rush to adjust the direction of monetary policy and will need to wait for clarity in various information in the next period because the economy is still in the expansion direction. While there are risks that may pressure inflation to accelerate in the future. It also needs to follow up on the monetary policy direction of main central banks abroad. In addition, the MPC has communicated that lowering interest rates cannot solve the problem. It is expected that the MPC will maintain the policy interest rate at 2.50 percent. Reducing the interest rate is more likely and it is necessary to follow the MPC's stance and economic developments. will continue closely,' Kr ungthai COMPASS stated. The Siam Commercial Bank Research Center, SCB EIC, expects that the MPC will maintain the policy interest rate at 2.5% throughout 2024. It is seen that the MPC will consider the economic and inflation trends forward in the medium to long term (Forward looking). More than numbers that have already occurred (Backward looking) If the economic and inflation trends of Thailand in the next period continue to be as SCB EIC has predicted that The economy will continue to expand close to its potential level of 3%, while general and core inflation will will gradually increase to the target range of 1-3%. The MPC will likely maintain the policy interest rate at the current level. which is a level consistent with the expansion of the economy and facilitates the maintenance of long-term economic and financial stability (Neutral rate) As continuously communicated by the MPC As for taking care of SMEs and vulnerable households with high debt burdens and slow income recovery, the MPC still tends to support the use of targeted measures and sustainable debt solutions. rather than using the policy interest rate as a comprehensive measure. and has a wide impact on all sectors in the economy. However, if the Thai economic trend in the next period grows significantly slower than the MPC's estimate based on the results of this meeting, In addition, the general inflation rate continues to be negative and is spread more widely among goods and services. The impact on core inflation will be more pronounced, which may result in the MPC having to consider reducing the policy interest rate. To make monetary policy consistent with economic trends and inflation that may not be as expected. Source: Thai News Agency