Central bank keeps policy interest rate unchanged

BANGKOK, March 29 (TNA) – The Bank of Thailand’s Monetary Policy Committee (MPC) on Wednesday voted unanimously to maintain the policy rate at 1.50 per cent to maintain accommodative financial conditions, which would facilitate the continuation of economic growth, said Jaturong Jantarangs, Secretary of the MPC. It also raised 2017 GDP growth forecast to 3.4 per cent from 3.2 per cent. The overall growth outlook improved on the back of a clearer recovery in merchandise exports, projected to grow 2.2 per cent rather than flat this year. Meanwhile, tourism continued to recover. Private consumption and investment however, continued to recover at a gradual pace, the BOT said in its statement. However, the baht appreciated somewhat against major trading partners’ currencies over the recent period which might not be as beneficial to the economy as it could. The committee viewed exchange rates might experience higher volatility in the period ahead due to uncertainties on the external front. According to the BoT, financial stability remained sound with sufficient cushion against economic and financial volatilities on both domestic and external fronts. However, there remained some risks that needed close monitoring such as the deterioration in loan quality of some business sectors. Headline inflation was expected to gradually rise, although demand-pull inflationary pressures remained low. Core inflation slowed down recently, in part due to the increase in excise tax last year, but was expected to gradually increase. (TNA)