The Bank of Thailand (BoT) announces its policy rate decision on Wednesday. The repo rate has been hiked at the past two meetings, and we expect another 25bp increase to 2.0%. The surge in the baht obviously complicates monetary policy-making and the consensus view is that the BoT will pause. It is a close call. But the level of the repo rate is still well-below average, the economy is strong, while core inflation is picking up. More policy tightening is necessary and surely the BoT will not want to delegate this to the inherently volatile currency markets.