Central bank assures any policy tightening will be gradual

Central bank assures any policy tightening will be gradual

Thailand's central bank kept its policy rate on hold last month due to heightened uncertainties and maintained its view that any policy tightening would be gradual and dependent on the economy's performance, its meeting minutes showed on Wednesday.

The Bank of Thailand's (BoT) monetary policy committee voted on March 20 by 7-0 to hold the one-day repurchase rate unchanged at 1.75% for a second straight meeting.

The central bank raised the rate for the first time in more than seven years in December to help curb financial risks, and have stated that its rates remain comparatively low against regional peers.

Thailand's downgraded 2019 economic growth forecast, low inflation, political uncertainties and trade war disruptions have reduced the chances of a rate hike this year.

The MPC will next review monetary policy on May 8.

According to the minutes, the committee would need to wait and assess the clarity of various factors due to heightened global economic and domestic uncertainties.

"Therefore, current accommodative policy would remain appropriate," the minutes said.

"Going forward, a policy rate increase would be gradual and follow a data-dependent approach, with a careful assessment of the outlook for growth, inflation, and financial stability, together with associated risks," the minutes said.

It noted there were pockets of risks in the financial system and that Thai asset prices recently came under pressure from political uncertainties, the minutes said.

Thailand held an election on March 24, its first since a 2014 coup, but the outcome remains uncertain until official results are announced on May 9.

On Monday, BoT Governor Veerathai Santiprabhob told Reuters that the central bank could afford to take a wait-and-see stance on monetary policy.

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