By Orathai Sriring
BANGKOK, Nov 17 (Reuters) – Thailand’s central bank is likely to leave its key interest rate unchanged at a record low on Wednesday to preserve limited policy room after earlier monetary and fiscal steps have helped the pandemic-hit economy recover, a Reuters poll showed on Tuesday.
The Bank of Thailand (BOT)’s Monetary Policy Committee (MPC) is expected to hold its one-day repurchase rate THCBIR=ECI at 0.50%, according to all 15 economists in a Reuters poll. It would be the four straight meeting that the rate has been left unchanged, following the last reduction in May.
Southeast Asia’s second-largest economy contracted a less than expected 6.4% in the September quarter from a year earlier and posted a better than expected 6.5% growth on the quarter, a marked improvement from the previous quarter as activity rebounded after coronavirus curbs were eased.
BOT Governor Sethaput Suthiwartnarueput said last month the key rate was already low so other measures, including fiscal policy, will have to play a major role in supporting the economy.
The BOT has cut rates by 75 basis points this year and provided soft loans and debt relief programmes to support an economy dependent on exports and tourism. The government has introduced a 1 trillion baht ($33 billion) response package.
“The rate should stay unchanged into next year as the BOT would rather focus on targeted measures,” said Takit Chartchredsak, economist at Asia Plus Securities.
Some analysts expect the BOT to cut rates later as the economy still faces a tourism slump, a strong baht THB=TH and months of months of political protests.
The improved third-quarter economic performance might reflect pent up demand that could fade, said Kobsidthi Silpachai, head of capital market research at Kasikornbank, who forecast a rate cut in the next quarter.
($1 = 30.15 baht)
Thailand’s policy rate, GDP and CPIhttps://tmsnrt.rs/36yjWCg
(Reporting by Orathai Sriring; Additional reporting by Satawasin Staporncharnchai; Editing by)
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