Thai central bank warns virus outbreak could hurt economic outlook

By Orathai Sriring

 

FILE PHOTO: The Bank of Thailand logo is seen in Bangkok, Thailand April 26, 2016. REUTERS/Jorge Silva/File Photo

 

BANGKOK (Reuters) -Thailand's economic outlook would be substantially affected by a surge in coronavirus cases, minutes of the central bank's last policy meeting showed on Wednesday, as the Bank of Thailand (BOT) saw a need to preserve limited policy room.

 

On Dec 23, the central bank's monetary policy committee left the one-day repurchase rate at a record low of 0.50% for a fifth straight meeting after three cuts earlier in 2020 to support a coronavirus-hit economy.

 

The central bank saw a need to preserve limited policy room to use at the most effective time, as the situation related to a new wave of coronavirus infections remained highly uncertain, the minutes said.

 

"Thailand's economic projection would be substantially affected in the case of a surge in new infections," the minutes warned.

 

"The committee thus saw a need to closely monitor development and assess the adequacy of government measures".

 

At the December meeting, the BOT cut its 2021 GDP growth forecast to 3.2% from 3.6%, while predicting a 6.6% contraction for 2020.

 

After managing to largely contain community spread of the virus for months, a cluster of cases in December linked to migrant workers and a gambling den has led to infections in over half of Thailand's provinces.

 

New restrictions aimed at fighting the outbreak, the country's most serious yet, will likely derail the economy's nascent recovery, with some analysts lowering this year's growth outlook to below 3%.

 

The committee was also concerned that a rapid rise of the baht could affect a fragile recovery, the minutes said.

 

A new foreign exchange ecosystem should be expedited to address structural problems in the currency market and encourage more balanced capital flows, they said.

 

The new ecosystem would allow Thais to invest abroad more easily and in larger amounts, increase flexibility in foreign exchange risk management for entrepreneurs, and promote competition among foreign exchange service providers, the minutes said.

 

-- © Copyright Reuters 2021-01-06

 

- Whatever you're going through, the Samaritans are here for you

- Follow Thaivisa on LINE for breaking COVID-19 updates

My economic outlook was ruined well before this when the £ dropped to 37 baht.

16 minutes ago, snoop1130 said:

The central bank saw a need to preserve limited policy room to use at the most effective time,

sure and in the mean time the baht keeps appreciating, exports non existent, but what the heck, let's keep waiting until it's all down hill and will call it the "most effective time" .... where did they find these people, what economic background they have

20 minutes ago, snoop1130 said:

Thailand's economic outlook would be substantially affected by a surge in coronavirus cases,

no way Sherlock, did they mean,  it hasn't been affected YET...  ????????????

A virus that has wiped out tens of TRILLIONS of global GDP, affecting likely 98% of the population on the entire planet, halting the Earth in a way never seen on such a global scale..... "could"... COULD?... could?   hurt the economy?

 

change that to "did and will"

 

and then say "The blizzard in Russia could hurt Thailand's economy."  That's a "could".  

Usual story. Blame Covid/Lack of containers/high baht/migrants etc for the diving economy.

It is never the fault of the government and its lack of good, economic policies.

I see inflation on the horizon as the economy starts to tank further than it has, but hey the upside for the HI-So's is that the baht will still keep flying high and for all of us the exchange rates will become what we do not want them to be.  Tighten up the belts folks.  Looks like many mama noodle dinners for some people who live close to the belt.

I warn the community more than a month ago, I believe I can run the Thai central bank.

Ya reckon? ????

I'm flabbergasted... 

can't see why they should not be awarded with the Nobel Prize in economics for that piece of research

10 hours ago, snoop1130 said:

After managing to largely contain community spread of the virus for months, a cluster of cases in December linked to migrant workers and a gambling den has led to infections in over half of Thailand's provinces.

Just out of interest - how many migrants go to the gambling dens ? If the answer is pretty few or none then then Thais that got it from the den got it from other Thais that the government have ignird testing

To state the blindingly obvious ...

Under which rock has these soothsayers been living?