Amid signs of economic recovery, MPC retains Thailand’s key policy rate
Members vote 6:1 to hold the rate at 2.5%
The Monetary Policy Committee (MPC) of the Bank of Thailand (BOT) voted on Wednesday to retain the policy interest rate at 2.5% per annum as it sees the Thai economy on a recovery track.
MPC secretary-general Piti Disyatat said the committee voted 6:1 to retain the current policy interest rate of 2.5%.
Piti said one member wanted the rate to be lowered by 25 basis points amid worries about Thailand’s economic growth dropping due to structural issues. The lone member also believed that the interest rate reduction would help ease some burden of debtors.
The BOT and the government of former prime minister Srettha Thavisin were often at odds, as the government repeatedly pressured the MPC to lower the policy rate to help stimulate the economy. The BOT, however, insisted that the rate was right for taming inflation while the economy was recovering.
Piti said the majority members of the MPC saw Thailand’s economy likely to expand as projected thanks to surging tourism and rising demand in the country while exports were recovering slowly.
Piti said the MPC expected the inflation rate would return to the targeted frame late this year.
“The majority members of the MPC see the current policy rate as still at a level in line with the economic expansion whose potential is improving,” Piti said.
“And the policy rate is in line with keeping economic and financial stability.”
Piti said the MPC had suggested that the BOT and the government continue to watch out for the impact of poor-quality loans.
