Thailand Maintains Policy Rate, Concerned About Stronger Baht

By Linda Khoo Hui Li BANGKOK, June 26 (Bernama) -- The Bank of Thailand on Wednesday announced that it will maintain its policy rate at 1.75 per cent for the fourth straight meeting amid weakening economic growth and a stronger currency. Assistant governor and secretary of the Monetary Policy Committee (MPC), Titanun Mallikamas, said the committee voted unanimously to maintain the policy rate. In deliberating on the policy decision, he said the committee assessed that the Thai economy would expand at a slower pace than the previous assessment mainly due to merchandise and services exports. “Inflation was projected to be in line with the previous forecast. Overall financial conditions remained accommodative and conducive to economic growth. “However, there were pockets of risks to financial stability in the future that warranted continued monitoring. “The committee viewed that the current accommodative monetary policy stance contributed to the continuation of economic growth and was appropriate given the inflation target. The committee thus voted to keep the policy rate unchanged at this meeting,” he said. On exchange rates, Titanun said the baht appreciated at a fast pace and outperformed regional currencies, which was a result of the weakening US dollar, short-term capital inflows and domestic factors. “The committee is concerned over the baht’s appreciation which might not be consistent with economic fundamentals, and will continue to closely monitor developments in exchange rates and capital inflows,” he said. He added that the Thai economy would expand at a slower pace due mainly to the softening momentum of external demand. He said the committee would continue to monitor developments in economic growth, inflation and financial stability, together with associated risks, especially the impacts of trade tensions, in deliberating on the appropriate monetary policy in the period ahead. -- BERNAMA