Bank of Thailand unlikely to hike rate in March

BANGKOK • The odds of another interest-rate increase by the Bank of Thailand (BoT) at the March review are low, according to a member of its Monetary Policy Committee (MPC).

The rate of inflation has so far undershot expectations, and it doesn’t appear as if there are fresh risks in the financial sector to merit a hike in borrowing costs this month, Kanit Sangsubhan said in an interview.

“The chance of increasing the interest rate is quite slim to me,” Kanit said in Bangkok on March 8, while adding that each policy decision depends on a full review on incoming macroeconomic data and the judgment of the MPC.

The BoT last month left borrowing costs unchanged after a quarter-point increase to 1.75% in December, the first hike in seven years. The central bank has said it needs to tackle pockets of risk in the financial sector and build policy space for the future.

At the same time, the committee signalled in the minutes of the February decision that the monetary stance needs to remain “accommodative” enough to support South-East Asia’s second-largest economy as exports and global growth moderate. Kanit, one of four external members of the seven-strong monetary panel, was unable to attend last month’s meeting.

Thai officials expect economic expansion to ease slightly this year to about 4%.

The BoT’s inflation target range is 1% to 4%. The next policy review is on March 20, a few days before the general election . — Bloomberg