Thai central bank holds rate at record low, trims 2021 growth forecast

[snoop1130]

FILE PHOTO: Thailand's central bank is seen at the Bank of Thailand in Bangkok, Thailand April 26, 2016. REUTERS/Jorge Silva/File Photo/File Photo

 

BANGKOK (Reuters) - Thailand's central bank left its key interest rate unchanged at a record low on Wednesday but slightly lowered its 2021 economic growth outlook as the tourism-reliant country recovers slowly from the COVID-19 pandemic.

 

Southeast Asia's second-largest economy continues to rebound but the risks remain high, the Bank of Thailand (BOT) said in a statement, adding the economy still needs support from low borrowing rates and that monetary policy would remain accommodative.

 

"The recovery would remain uneven across economic sectors," it said, adding the continuity of government measures and policy coordination among government agencies would be critical.

 

The BOT reiterated that limited policy room should be preserved to be used at the most effective time.

 

The BOT's monetary policy committee (MPC) voted unanimously to keep the one-day repurchase rate steady at a record low of 0.50% for a seventh straight meeting.

 

All 14 economists in a Reuters poll had expected the BOT to remain on hold this week, after delivering three rate cuts in 2020 to soften the blow from the pandemic.

 

"Barring unexpected shocks, the key rate should remain at the current level to support growth as tourism will not come back quickly," said Phacharaphot Nuntramas, economist at Krung Thai Bank.

 

Kobsidthi Silpachai, head of capital markets research at Kasikornbank, said the BOT's outlook downgrade suggested tourism would take much longer to recover.

 

The BOT trimmed its 2021 growth forecast as it cut its projected tourist figures for this year, and as a second wave of coronavirus infections in December hampered economic activity.

 

While Thailand has since largely contained the outbreak and has eased restrictions, its all-important tourism sector, hit by global travel curbs, continues to suffer. But Thailand is preparing to gradually reopen to foreign visitors.

 

The central bank expects the economy to expand 3.0% this year, after suffering its biggest fall in over two decades last year, but the projection is slightly more modest than the 3.2% forecast in December.

 

First-quarter gross domestic product (GDP) is expected to contract from the previous quarter because of the outbreak, MPC secretary Titanun Mallikamas told a briefing.

 

The economy might return to pre-pandemic levels in the middle of next year as tourism remained slow, he added.

 

The BOT now expects 3 million foreign tourists this year, down from 5.5 million projected previously. That compared with 6.7 million visitors last year and nearly 40 million in 2019.

 

However, the BOT raised its export growth view to 10% this year, up from a previous forecast for a 5.7% increase, in line with the expansion of trading partners' economies.

 

The BOT said the baht was moving in line with regional currencies and it would continue to expedite its new foreign exchange ecosystem.

 

The BOT predicts a current account surplus of just $1.2 billion this year, down from $11.6 billion seen previously.

 

-- © Copyright Reuters 2021-03-24

 

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[RichardColeman]

7 hours ago, snoop1130 said:

The BOT now expects 3 million foreign tourists this year, down from 5.5 million projected previously. That compared with 6.7 million visitors last year and nearly 40 million in 2019.

The reality is that Thailand's tourism is getting worse - not better. With half the arrivals of last year coming this year, I cannot see how they can be predicting any growth at all

 

7 hours ago, snoop1130 said:

However, the BOT raised its export growth view to 10% this year, up from a previous forecast for a 5.7% increase, in line with the expansion of trading partners' economies.

Now your just being silly

[Enzian]

The dollar index is improving slightly, for what reason I don't know. There is a pile of dollars I want to convert to baht, and I read these articles to see if there is any chance the opportunity will come. But uncertainty is king.

[hotchilli]

14 hours ago, snoop1130 said:

The BOT trimmed its 2021 growth forecast as it cut its projected tourist figures for this year, and as a second wave of coronavirus infections in December hampered economic activity.

Keep trimming, the way inoculations are going tourism won't be here in droves this year either.

[tingtong]

Almost impossible the economy to expand 3% this year, with tourism literally out, and countless businesses closed, many bankrupt.

 

The usual optimistic fudging of reality.