Thai Central Bank Sees No Pressure if Fed Raises US Rates
BY :KITIPHONG THAICHAREON
MARCH 10, 2017
Bangkok. Thailand's central bank expects there will be no pressure on the country's monetary policy if the Federal Reserve raises US interest rates next week, a deputy governor said on Thursday (09/03).
The baht will also not weaken much if US rates go higher, thanks to Thailand's large current account surplus, Bank of Thailand Deputy Governor Mathee Supapongse told reporters.
"If the Fed raises interest rates, there won't be any pressure on our monetary policy implementation," he said, adding the Fed might raise US interest rates a few times this year.
Thailand's central bank next reviews monetary policy on March 29.
It has left its policy interest rate unchanged at 1.50 percent since April 2015, and analysts expect no change at the coming meeting.
Mathee said Thailand's economic fundamentals remain strong, which would help prevent any panic in the market rooted in higher US interest rates.
A weakening of the baht would be good for the country's economic recovery, he said. Exports, which have been weak for years, traditionally are a key driver of economic growth.
On Thursday afternoon, the baht was trading around 35.36 per dollar, near a seven-week low, following recent fund outflows from Thai stocks and bonds.
The baht has strengthened more than 1 percent against the dollar in 2017.