The current political stalemate can only be resolved if both sides negotiate, Bank of Thailand governor Prasarn Trairatvorakul says.
He said several individuals and organisations are prepared to act as mediators.
Bank of Thailand governor Prasarn Trairatvorakul (Photo by Apichart Jinakul)
Mr Prasarn urged both sides to avoid violence and seek a compromise. He said while the demonstrations have remained peaceful, the crisis was having a negative impact on the economy, including domestic consumption, private investment and tourism.
But capital flows remain fairly balanced at the moment, and Mr Prasarn said the country's high level of foreign reserves would help cushion against volatility.
Thailand had foreign reserves of $168.8 billion as of Nov 22.
Last week the central bank surprised analysts by cutting its policy interest rate by a quarter of a percentage point.
The Monetary Policy Committee said that the move was aimed at helping buffer the economy from "higher downside risks to growth" which could be "compounded by [the] ongoing political situation".
The Bank of Thailand also cut its economic forecast for 2013 to just 3% growth from last year, compared with a 3.7% growth forecast made in October.
Mr Prasarn said the political situation needed to be monitored closely, and that the central bank would hold talks with commercial bank leaders to assess the situation.
Local banks have flexibility in deciding whether to temporarily close bank branches near protest sites, he added.
On Friday, the Thai Chamber of Commerce said it was willing to mediate talks between the government and anti-government protesters.