Thai central bank keeps policy rate at record low, as expected

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Thai central bank keeps policy rate at record low, as expected

By Orathai Sriring and Kitiphong Thaichareon

 

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

 

BANGKOK (Reuters) - Thailand's central bank left its key interest rate unchanged at a record low on Wednesday, preserving its limited policy ammunition, but warned of risks as the country deals with a fresh wave of coronavirus infections.

 

Southeast Asia's second-largest economy continues to recover but risks remain high and it could grow less than the previously forecast 3.2% this year, monetary policy committee secretary Titanun Mallikamas told a news conference.

 

The Bank of Thailand's committee members voted unanimously to keep the one-day repurchase rate unchanged at a record low of 0.50% for a sixth straight meeting, after three cuts in the first half of 2020.

 

The economy still needs support from low interest rates and monetary policy will remain accommodative, he said.

 

The BOT said in a statement the impact of the recent outbreak on the Thai economy would be less severe than last year due to less strict containment measures, but it expects the economy to expand at a slower pace than previously forecast.

 

Support from the targeted government measures together with the export recovery will, however, support economic growth, it added.

 

Twelve economists surveyed by Reuters had expected the BOT to remain on hold, with two analysts predicting a 25 basis-point cut, citing the impact from new COVID-19 infections.

 

The rate was last cut in May 2020, when the tourism-reliant economy was first hit by the pandemic.

 

Thailand had largely contained the coronavirus by mid-2020 but the new cases detected in December have led to infections across the country. Economists worry the latest outbreak will hurt the country's fledgling recovery as tourism flounders.

 

In December, the BOT reduced its 2021 GDP growth outlook to 3.2% from 3.6% due to the slump in tourism. It later said the forecast could be cut again due to the outbreak.

 

Last week, the finance ministry slashed its growth outlook to 2.8% this year from 4.5%..

 

(Reporting by Orathai Sriring, Kitiphong Thaichareon, Satawasin Staporncharnchai; Editing by)

 

-- © Copyright Reuters 2021-02-03

 

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BOT keeps interest rate at 0.5% amid weak economic recovery

By The Nation

 

 

The Bank of Thailand (BOT) kept its benchmark interest rate unchanged on Wednesday.

 

The unanimous vote to maintain the policy rate at 0.5 per cent was exercised to support a fragile economic recovery. The BOT policy committee assessed that the new outbreak of Covid-19 would take a short-term toll on the Thai economy.

 

However, exports and stimulus from government measures were expected to improve, said Titanun Mallikamas, secretary of the Monetary Policy Committee (MPC) after Wednesday’s meeting.

 

The MPC calculated the economic impact of the fresh outbreak was not as severe as the first wave, thanks to less stringent disease-control measures.

 

Meanwhile the economy had responded quickly to government stimulus measures while recovery of exports had gathered pace. As a result, the Thai economy had expanded – though slightly less than previously estimated.

 

In the short term, economic recovery will depend on the effectiveness of control measures for the new virus wave. The next phase of recovery would depend on the return of foreign tourists and the effectiveness of Covid-19 vaccination programmes.

 

The labour market would also be affected by the new outbreak, resulting in a short-term rise in unemployment and virtual unemployment.

 

The committee said it would use additional monetary tools to support economic recovery if appropriate, while monitoring both the sufficiency of government measures and various risk factors – especially the pandemic situation both here and abroad.

 

Source: https://www.nationthailand.com/business/30402201

 

-- © Copyright The Nation Thailand 2021-02-04

 

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[Isaan sailor]

Obviously someone likes a high currency, so they won’t change the rate to be competitive.

[Mike Rodik]

does this mean, get almost NOTHING as interest anymore from the bank that charge 6-7 percent per year for a loan ?

 

those poor banks have to save money, by not giving 1 or 2 percent anymore ...

 

I remember long time ago, 3.5 percent gross