Thailand Says Monetary Policy Space Remains as Recovery Stays Uneven

Thailand monetary policy should remain accommodative as the country’s economic recovery remains low and uneven, with scope for further interest-rate cuts if necessary.

Minutes from the Bank of Thailand’s Aug. 26 meeting showed the monetary policy committee unanimously kept its one-day repurchase rate at 1% for a third consecutive meeting.

Policymakers said further easing outside a crisis could produce limited benefits relative to potential side effects. Preserving policy space was also important because interest rates were already low by historical standards.

The committee highlighted risks from the Middle East conflict, trade protectionism and inflation as factors affecting the economic outlook.

Governor Vitai Ratanakorn said monetary policy remained fully accommodative and appropriate for current conditions.

Thailand’s economy is expected to grow 2.3% this year, leaving policymakers balancing support for the recovery against the need to retain room to respond to future economic shocks.