Monetary Policy Committee keeps key policy rate at 0.5%
The central bank's Monetary Policy Committee (MPC) on Wednesday retained the key policy rate at 0.5 per cent to support the economy's growth.
Piti Disyatat, assistant governor for monetary policy at the Bank of Thailand, said the decision was reached unanimously by the committee members.
He said the low policy interest rate of 0.5 per cent would support economic expansion along with other monetary and finance policies that focus on rehabilitation and increasing economic potential.
The measures are aimed at helping workers, businesses and households to have more income with sustainability, Piti added.
The committee believes that Thailand’s economy expansion will exceed the panel's estimate at the last meeting.
The panel expects the country's growth this year to be driven by growth in exports and increase in foreign tourists following the easing of Covid-19 restrictions, Piti said.
The MPC acknowledges that different economic sectors would see different levels of growth, Piti said. For example, the tourism sector would see growth lower than the pre-Covid level.
The MPC wants the government to continue to monitor Covid-19's impact on workers, who would also be hit by rising cost of living and the fact that their pays have not been fully restored.
The committee realises that inflation may exceed the target in the first quarter because of rising prices of fresh foods and energy, but the average inflation in the year would be within the target because the committee does not expect to see more increases in prices of goods, Piti said.
He added that the MPC expected demand pressure on inflation to still be low this year.
The committee believes the country still enjoys high liquidity in the money system but the levels of liquidity would be different in different sectors.
The MPC advised the government to closely monitor global and Thai currencies and to create a new FX (foreign exchange) ecosystem to protect businesses from exchange risks, Piti said.
The committee called on the government to maintain health policies that would benefit economic recovery and to use monetary and finance policies to distribute liquidity to target groups. For example, the government should use a debt consolidation policy to allow financial institutions to help those in housing debt and micro-finance debt, Piti said.
