Thai Central Bank Seen Keeping Rates Steady Despite Strong Baht

The Bank of Thailand will keep its benchmark interest rate near record lows again. (Reuters Photo/Sukree Sukplang)

By : Orathai Sriring and Chinthathip Nanthavong | on 3:00 PM August 12, 2017
Category : International, SE Asia

Bangkok. Thailand's central bank will keep its benchmark interest rate near record lows again, a Reuters poll showed, as inflation is benign and the economy is improving but high household debt levels remain a concern.

The baht is at more than two-year highs against the US dollar, but that should not prompt a rate cut, as policymakers have said Thailand's export competitiveness has not been dented by the currency's strength.

All 21 economists in the poll forecast the Bank of Thailand's one-day repurchase rate will be kept at 1.50 percent when its monetary policy committee meets on Aug. 16.

The rate has been steady since a quarter-point cut in April 2015.

Annual headline consumer prices rose just 0.17 percent in July, well below the Bank of Thailand's 1-4 percent target range.

All 18 analysts in the poll who gave a view on year-end rates also expected no change throughout 2017.

At its July 5 review, the MPC said policy should remain accommodative as domestic demand was not sufficiently broad-based.

Growth in Southeast Asia's second-largest economy still lags regional peers. The Bank of Thailand predicts growth of 3.5 percent this year after 3.2 percent in 2016.

Reuters

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