Thai central bank has no need to quickly adjust policy - governor

[webfact]

Thai central bank has no need to quickly adjust policy - governor

By Kitiphong Thaichareon

 

FILE PHOTO: Thailand's Central Bank Governor Veerathai Santiprabhob is seen during an interview with Reuters at the Bank of Thailand headquarters in Bangkok, Thailand March 14, 2018. REUTERS/Jorge Silva/File Photo

 

CHIANG MAI, Thailand (Reuters) - Thailand's central bank sees no need to quickly adjust its monetary policy, despite expecting lower economic growth this year, the governor said on Monday.

 

Monetary policy decisions will still depend on economic data, Bank of Thailand Governor Veerathai Santiprabhob told reporters in the northern city of Chiang Mai.

 

"We don't need to react immediately despite cutting our growth forecast to 3.3% (from 3.8%) this year... because we expect growth to rebound to 3.7% next year," he said.

 

The economy is expected to perform better in the second half of this year, helped by a recovery in exports and expected stimulus measures by the new government, Veerathai said.

 

The central bank has left its policy interest rate <THCBIR=ECI> unchanged at 1.75% - just half a point above the record low - since raising it by 25 basis points in December.

 

Its next review policy is on Aug. 7.

 

Some analysts expect it to ease policy later this year as growth slows. ING predicts two 25 basis-point cuts in the second half.

 

Some Asian central banks that raised rates in 2018 have cut them to boost sagging growth.

 

Thailand's policy rate is "quite low" compared with those of other emerging countries, while risks to financial stability remain, Veerathai said.

 

Southeast Asia's second-largest economy expanded 4.1% last year, the fastest pace in six years, but lagged its regional peers.

 

Veerathai said the central bank is not happy with "hot" money flowing into the country and has sometimes taken action to temper excessive moves in the baht <THB=TH>, but not for an advantage in trade.

 

The BOT is ready to impose measures if the country receives unusually large capital inflows that would make the baht move beyond economic fundamentals, he said.

 

"We don't want short-term money parking here," he said.

 

Options would include reducing bond supplies, he said. The BOT last week cut its supply of three-and six-month bonds at auctions in July.

 

The baht's strength has also been driven by a weak dollar, Thailand's large current account surplus, which is expected to be $29 billion this year, Veerathai said.

 

The baht has appreciated about 5.7% against the dollar this year, making it the best performing currency in Asia.

 

(Reporting by Kitiphong Thaichareon and Orathai Sriring; Writing by Orathai Sriring; Editing by Richard Borsuk & Kim Coghill)

 

-- © Copyright Reuters 2019-07-09

Follow Thaivisa on LINE for breaking Thailand news and visa info

[nkg]

36 minutes ago, webfact said:

Options would include reducing bond supplies, he said. The BOT last week cut its supply of three-and six-month bonds at auctions in July.

 

https://www.nasdaq.com/article/thai-cbank-cuts-shortterm-bond-supply-in-july-amid-rapid-baht-gains-20190701-00121

 

Good news ???? The BOT are finally taking action to reduce the strength of the baht.

 

Let's see what else the BOT do in the coming months.

 

[smedly]

1 hour ago, webfact said:

governor

how about you declare your overseas assets 

[FarFlungFalang]

2 hours ago, webfact said:

The economy is expected to perform better

 

2 hours ago, webfact said:

despite expecting lower economic growth

 

2 hours ago, webfact said:

because we expect growth

 

2 hours ago, webfact said:

expected stimulus

Seems like a lot of expectations!

[mok199]

Smoke and mirrors...

[rgrdns]

1 hour ago, mok199 said:

Smoke and mirrors...

Hum....as usual....

[quadperfect]

If the dollar is weak why is it right up there in near highs against the dong,ringit,aussy? And all other asian currency.

I am far from knowledge on this subject ,but the dollar is trading  near 30 bht again .

This country is just all corrupted. 

But thats what makes the place what it is.

 

[Isaan sailor]

Actions speak louder than words.  Lower interest rates—and Chinese hot money USD will diminish.   But BoT seems quite satisfied with Chinese hot money flowing in.  One has to wonder why...

[klauskunkel]

5 hours ago, webfact said:

Monetary policy decisions will still depend on economic data

That includes the numbers from TAT, don't it? Oh Lord...

[Isaan sailor]

How can I partake in some of this Chinese hot money—that BoT so warmly accepts?

[Srikcir]

6 hours ago, nkg said:

 

https://www.nasdaq.com/article/thai-cbank-cuts-shortterm-bond-supply-in-july-amid-rapid-baht-gains-20190701-00121

 

Good news ???? The BOT are finally taking action to reduce the strength of the baht.

 

Let's see what else the BOT do in the coming months.

 

Cutting the rates for short term bonds has almost zero affect on the baht value.

BOT did a similar cut in 2015 and here we are now with a higher baht value.

It's just a deliberate distraction.

If BOT had cut ling term bond rates two years ago when economists first recommended the cut to save exports, it wouldn't now have to be concerned about a "quick" cut.

[lipflipper]

Why of course that would his idiotic postition given that he is nothing more than a shill for the Uber Rich in Thailand who need the Baht kept at its current level. How else are they going to afford the apartments, yachts, homes, private jets away from Thailand. My God, this toss..er would be shown the exit door rather quickly if he had the balls to stand up for all Thai people and actually do what is best for the Thai economy.

Sent from my CMR-AL19 using Thailand Forum - Thaivisa mobile app

[hotchilli]

The loss of trade in exports will come back to haunt him eventually.

[Krataiboy]

This is all starting to sound worryingly familiar.

 

When I first came to Thailand as a tourist in the mid-1990s the joint was jumping, with foreign speculators pouring investment money into LOS and other so-called "tiger" economies as if it were going out of fashion. The Thai baht was almost as strong against the pound as it is today.

 

A few years later, the financial bubble burst, and Thailand and the rest of the tigers ended up tamed and shabby. Suddenly, we Brits were getting 80 baht for a pound, and my Thai wife and I were able to buy a house in Hua Hin for a relative snip. 

 

I'm no economist, but the similarities between the situation prior to the 1997 collapse and today appear - superficially at least - pretty striking, particularly when viewed against a domestic landscape of rising inflation and record levels of household debt.

 

Are we about to go from boom to bust?

 

. 

[marcusarelus]

2 minutes ago, Krataiboy said:

This is all starting to sound worryingly familiar.

 

When I first came to Thailand as a tourist in the mid-1990s the joint was jumping, with foreign speculators pouring investment money into LOS and other so-called "tiger" economies as if it were going out of fashion. The Thai baht was almost as strong against the pound as it is today.

 

A few years later, the financial bubble burst, and Thailand and the rest of the tigers ended up tamed and shabby. Suddenly, we Brits were getting 80 baht for a pound, and my Thai wife and I were able to buy a house in Hua Hin for a relative snip. 

 

I'm no economist, but the similarities between the situation prior to the 1997 collapse and today appear - superficially at least - pretty striking, particularly when viewed against a domestic landscape of rising inflation and record levels of household debt.

 

Are we about to go from boom to bust?

The 1997 financial crisis was caused when the Thai government was forced to float the baht due to lack of foreign currency to support its currency peg to the U.S. dollar.  Now does that sound anything like today?  1.  No peg.  2.  Massive foreign reserves.    ..........

 

Try again.  

[marcusarelus]

3 hours ago, Isaan sailor said:

How can I partake in some of this Chinese hot money—that BoT so warmly accepts?

Does not go to the BoT.  Comes in in cash or gold.  And is invested which makes the economy and employment strong.  

[geistfunke]

10 hours ago, webfact said:

"We don't need to react immediately despite cutting our growth forecast to 3.3% (from 3.8%) this year... because we expect growth to rebound to 3.7% next year," he said.

The business for this year is done. Unfortunately, I can't see a positive point about why things should get better next year. On the contrary, many export companies will not survive this year.