The Bank of Thailand's Monetary Policy Committee on Wednesday agreed to keep its policy rate unchanged at 2.5% for a third straight meeting, in line with the market’s expectations.
MPC secretary-general and central bank assistant governor Paiboon Kittisrikangwan said the meeting voted 6 to 0 to maintain the rate, on the grounds the current key policy rate is suitable to enhancing economic growth.
One MPC member, chairman of the central bank Ampon Kittiampon, did not attend the meeting.
Mr Paiboon said the meeting had assessed the overall economic situation and inflation rate in making its decision. It concluded the Thai economy grew at a slower pace than expected, but there were signs of improvement in some sectors.
The export sector was recovering on the back of global economic recovery, while domestic consumption and private investment maintained poise, he said.
Risk factors that could derail the Thai economic recovery included uncertainty over global economic recovery and the delays in the government’s planned investment in infrastructure development megaprojects, he added.
The MPC also took into account the impact of a huge loss from the rice scheme that could affect the country’s fiscal status in the future, increasing household debt and the possible negative consequences of foreign capital outflow.
Mr Paiboon said the meeting also believed the government shutdown in the US was not a cause for concern as it had happened many times.
The MPC was worried about the US debt ceiling conflict because if the problem cannot be settled, it would severely affect global economic and monetary stability. But the MPC believed the conflict will be resolved before the deadline.
However, the MPC has come up with measures to deal with any possible impact of a global economic crisis and the outflow of foreign funds, but could not disclose details at this time, he said.