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Thai central bank seen keeping rates unchanged this week, and for rest of year: poll
May 22, 2017 / 9:51 AM / 4 months ago

Thai central bank seen keeping rates unchanged this week, and for rest of year: poll

FILE PHOTO: Thailand's central bank is seen at the Bank of Thailand in Bangkok, Thailand in this April 26, 2016 file photo. REUTERS/Jorge Silva/File Photo

BANGKOK (Reuters) - The Bank of Thailand’s policy review on Wednesday will keep its benchmark interest rate at 1.5 percent, where it has been for more than two years, a Reuters poll of economist predicted, as inflation in benign and the economy is recovering slowly.

All 19 economists surveyed forecast that the central bank’s one-day repurchase rate THCBIR=ECI will be kept at 1.50 percent when its monetary policy committee (MPC) meets.

The rate has been on hold since a cut in April 2015 and is just 25 basis points above the record low reached in 2009.

Policymakers have said monetary policy still supports the economic recovery and government spending remains a key driver of growth while high household debt is still a concern.

Last week, large Thai banks unexpectedly cut loan rates for some customers, which should also ease pressure on the central bank to act.

Southeast Asia’s second-largest economy grew at its fastest quarterly pace in four years in January-March, aided by stronger exports and consumption. But it still lags regional peers.

At its March 29 review, the MPC said sufficiently accommodative monetary policy remained necessary given that economic growth was still in the early stages and not yet

broad-based.

Fifteen of 17 analysts in the poll forecast no rate change through 2017 while two others saw a hike in the second half to curb fund outflows in response to higher U.S. interest rates.

Headline inflation was only 0.38 percent in April, below the BOT’s 1-4 percent target range.

Reporting by Orathai Sriring; Editing by Simon Cameron-Moore

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