Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Thai key rate near balanced level, politics won't impact policy - central bank chief

Published 08/16/2023, 03:37 AM
Updated 08/16/2023, 03:41 AM
© Reuters. FILE PHOTO: Bank of Thailand Governor Sethaput Suthiwartnarueput speaks during his first briefing on the economy and monetary policy after taking office in Bangkok, Thailand October 20, 2020. REUTERS/Chalinee Thirasupa/File Photo

By Orathai Sriring and Kitiphong Thaichareon

BANGKOK (Reuters) - Thailand's current level of the benchmark interest rate was nearly balanced, the central bank governor said on Wednesday, adding that monetary policy would not be affected by a delay in the formation of a new government.

The Bank of Thailand (BOT) has raised its key rate seven times to 2.25% since last August to tame inflation and help foster a smooth economic recovery.

As the recovery remained intact, the BOT would ensure its monetary policy was suitable for the longer term, with inflation sustainably in the target range of 1% to 3%, Governor Sethaput Suthiwartnarueput told a central bank seminar.

"It's near a balanced point, where the key rate allows the economy to grow as its potential and inflation is within the target range without creating vulnerability to the economic system," he said.

A delay in the formation of a government following the elections in May would not impact the central bank's policy implementation, but capital movement and the baht, the governor said.

"Political factors have weakened the baht lately as they created uncertainty," he said. The baht has lost 2.5% against the dollar so far this year.

Thailand has been under a caretaker administration for five months as deadlock prolongs after the election-winning Move Forward party's failure to form a government.

Commenting on inflation, Sethaput said the headline rate was lower than expected but would later return to the target.

Last week, the governor said the BOT might hold or hike the key rate at its next policy meeting on Sept. 27.

Minutes from the monetary policy meeting on Aug. 2 also said that policy rates were approaching stability levels.

Southeast Asia's second-largest economy has been driven by consumption and tourism, with foreign tourist arrivals predicted at 29-30 million this year, Sethaput said.

© Reuters. FILE PHOTO: Bank of Thailand Governor Sethaput Suthiwartnarueput speaks during his first briefing on the economy and monetary policy after taking office in Bangkok, Thailand October 20, 2020. REUTERS/Chalinee Thirasupa/File Photo

Second-quarter gross domestic product (GDP) data, however, might not be "that good" because of softer exports, he added.

The economy expanded 2.7% year-on-year in the first quarter, helped by tourism. Official second-quarter GDP data is due to be released on Aug. 21.

 

 

 

Latest comments

The teflon baht,
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.