Thai central bank can afford to ‘pause’ on policy: governor

FILE PHOTO:  Thailand's Central Bank Governor Veerathai Santiprabhob is seen during an interview with Reuters at the Bank of Thailand headquarters in Bangkok
FILE PHOTO: Thailand’s Central Bank Governor Veerathai Santiprabhob is seen during an interview with Reuters at the Bank of Thailand headquarters in Bangkok, Thailand March 14, 2018. REUTERS/Jorge Silva/File Photo

April 1, 2019

BANGKOK (Reuters) – Thailand’s central bank governor downplayed risks to the economy from the disputed recent election, but cited external risks and said on Monday the country can afford to take a wait-and-see stance on monetary policy.

While any delay in forming a government after the March 24 election, Thailand’s first since a 2014 coup, could affect investor confidence and some investment projects, it would not have much impact on economic policy, Veerathai Santiprabhob told Reuters in an interview.

“When we made the forecast of 3.8 percent, we had factored in some effects of the election on the economy,” he said.

The outcome remains uncertain and might not be known until after official results are due, on May 9. Both the Pheu Thai Party, which supports ousted former prime minister Thaksin Shinawatra, and the pro-army Palang Pracharat have claimed enough votes to form a government.

Veerathai said Thailand has no need to follow the policy decisions of other countries, and Thailand’s policy rate is low compared with others.

“Monetary policy needs to serve the purpose of each country,” he said. “The central bank can afford to take a pause and review the situation very carefully.”

On March 20, the central bank’s monetary policy committee (MPC) voted unanimously to keep the benchmark interest rate unchanged at 1.75 percent.

At the meeting, the central bank lowered its 2019 growth forecast for the second time in three months, to 3.8 percent from 4.0 percent.

(Reporting by Orathai Sriring and Kay Johnson; Editing by Richard Borsuk)

Source link