* C.Bank keeps key rate at record low 0.5%, as expected
* Asks economy to grow closer to forecast
* Economists expect rates to remain unchanged for some time (adds briefing, economists’ comments)
BANGKOK, Nov 10 (Businesshala) – Thailand’s central bank left its key interest rate unchanged at a record low on Wednesday, warning that the recovery remains fragile even though it has reopened to foreign visitors and is trying to get its important tourism sector back on track.
The Bank of Thailand said inflation could be higher than forecast due to energy prices, but it is likely to be temporary. Southeast Asia’s second largest economy is recovering from the pandemic and there is no inflationary pressure yet.
The central bank’s monetary policy committee unanimously voted for the 12th straight meeting to keep the one-day repurchase rate at 0.50%, as expected by all 21 economists in a Businesshala poll here.
“The committee assessed that the Thai economy had bottomed out in the third quarter of 2021 and entered a recovery phase after the easing of containment measures and the country’s reopening,” the BOT said in a statement. Here after the policy meeting
But the fragile economic recovery outlook will be subject to uncertainties, it added.
Kobasiddhi Silpachai, head of capital markets research at Kasikornbank, said the economic output gap between real and trend remains wide and will take a long time to close and generate demand-inflation. “Thus, we see no stone unturned in the next 12 months.”
Capital Economics said the key rate is expected to be 0.50% until at least the end of 2022, as “the tourism sector is still struggling, the economy is recovering at a slow pace”.
In efforts to restart tourism, the “Land of Smiles” reopened to vaccinated visitors without quarantine requirements from November 1 after more than a year of strict entry restrictions.
The BOT said the Thai economy would expand at a pace close to the previous projection for 2021 and 2022, on the back of domestic spending, which gradually recovered after easing control measures, partially bridging the adverse impact of higher global energy prices. is largely offsetting, the bot said.
In September, BOT forecast economic growth of 0.7% this year and 3.9% next year.
Assistant Governor PT Divyat told a press conference that the recent baht strength should not affect the country’s exports, while capital movement remained normal.
He added that the BOT is prepared to deal with any financial instability due to high US interest rates.
The BOT stated that the baht was more volatile and that it would closely monitor market developments and continue to work on rectifying structural issues in the forex system. ($1 = 33.14 baht)