Thai policy rate unchanged
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The Bank of Thailand's Monetary Policy Committee resolved to maintain the policy rate at 2 per cent per annum at its meeting today.
Only one of seven members voted for a cut by 25 basis points.
The committee projects sustained economic recovery in 2015, and deems that the current monetary policy is sufficiently accommodative and does not hinder the ongoing recovery, according to a statement.
The stance is also consistent with long-term financial stability. Nevertheless, the committee expresses concerns regarding greater downside risks from global growth and the timeliness of public investment spending. One member assessed that further accommodation is needed in order to reinforce the momentum of economic recovery.
"The MPC will closely monitor developments of the Thai economy, and will pursue appropriate policy to ensure adequate support to the recovery, as well as long-term financial stability," it said.
Several economic houses expected the the MPC to maintain the policy rate, though given low inflationary pressure there is greater flexibility for a rate cut. According to HSBC, high household debt could be one factor that would convince the members not to cut the rate.
