BANGKOK, March 30 (NNN-Bernama) — The Bank of Thailand (BoT) has kept its policy rate at a record low of 0.5 per cent to help facilitate a sustained economic recovery.
BoT Monetary Policy Committee (MPC) today voted unanimously to maintain the benchmark interest rate at the same level since May 2020.
The central bank also lowered its 2022 economic growth forecast from the 3.4 per cent made in December to 3.2 per cent.
In a statement, MPC secretary Piti Disyatat said the committee assessed that the Thai economic recovery would remain intact this year and in 2023, despite impacts from sanctions against Russia which had led to higher energy and commodity prices and a slowdown in external demand.
He said average inflation for full-year 2022 would exceed the target range but was expected to decline and return to target in early 2023 with energy and food prices stabilising.
“The committee assesses that recent increases in inflation have stemmed primarily from cost-push factors, while demand-pull inflationary pressures have remained subdued. The committee thus voted to maintain the policy rate at this meeting,” he said.
Meanwhile, the central bank cut this year’s economic growth projection to 3.2 per cent amid the impact of the Omicron variant outbreak on economic activities.
“Sanctions against Russia have pushed the cost of goods higher but will not derail the overall recovery path. Nonetheless, downside risks to growth remain, including prolonged shortages of raw materials in certain industries and the impact of higher prices on living costs for households and production costs for businesses, particularly toward vulnerable groups.
“The committee (MPC) will closely monitor developments in the abovementioned situations closely,” BoT said.
On exchange rates, Piti said the baht had depreciated relative to the US dollar due to concerns over the Russia-Ukraine war and the expectation of monetary policy normalisation in advanced economies.
“The committee will closely monitor developments in both global and domestic financial markets, and continue to expedite the new foreign exchange ecosystem, particularly through supporting small and medium enterprises in hedging against risks from exchange rate volatility,” he said.
Piti said MPC would closely monitor key factors affecting the economic and inflation outlook, namely global energy and commodity prices, higher cost pass-through, and geopolitical risks that could elevate and pose uncertainties in the period ahead.
“The committee stands ready to use appropriate monetary policy tools if necessary,” he said.
