BANGKOK • Thailand’s central bank is under no immediate pressure to raise interest rates like emergingmarket (EM) peers elsewhere given the nation’s solid buffers and relatively strong currency, governor Veerathai Santiprabhob (picture) said.
The Bank of Thailand (BoT) is monitoring economic developments closely, including risks to the growth outlook from trade protectionism, Veerathai said in an interview with Bloomberg Television’s Haslinda Amin yesterday in Bangkok. While inflation returned to the 1% to 4% target range, it remains subdued, he said.
“With our strong external position, the need for Thailand to increase the policy rate is not as imminent as other EMs,” he said. “We have strong enough buffers, so we are not under pressure as other EMs that might be vulnerable to the global financial conditions. So, we can utilise our monetary policy autonomy to meet the needs of the Thai economy.”
Veerathai struck a more dovish tone than last week, when he said the central bank is waiting for the right time to consider an interest-rate hike, prompting some analysts to bring forward their calls for a policy move to later this year. The BoT has kept its benchmark rate at 1.5%, near a record low, since 2015, in contrast to counterparts in Indonesia, the Philippines and others, which have tightened policy this year in lieu of currency turmoil.
Thailand’s US$203 billion (RM834.35 billion) in foreign exchange reserves, and a current account surplus of about 8% of gross domestic product, have sheltered it from the worst of the EM rout that’s hit its neighbours.