In spite of growing downside risks to global growth, the Bank of Thailand (BoT) raised its repo rate by 25bp to 3.5% today. The BoT’s decision-making is being heavily influenced by the outlook for local fiscal policy. We expect another 25bp hike in one of the BoT’s two remaining meetings this year. Nonetheless, we think that Thailand’s policy rate is unlikely to be raised further in 2012.