The Bank of Thailand (BoT) yesterday decided to keep its policy interest rate, which has come into effect since early April last year, unchanged at 1.25 percent.
The central bank’s Monetary Policy Committee (MPC) during its meeting yesterday viagra 100mg still saw several risk factors which could hamper the continuation of global economic recovery despite the country’s economy has improved satisfactorily since the last quarter of last year.
Paiboon Kittisrikangwan, the central bank’s assistant governor, on behalf of the MPC’s secretary, said although the global economic outlook has improved and some countries have begun to normalize their monetary policy stances, the remaining risk factors, such as high unemployment and sovereign debt problems in some countries, could hamper the sustainability of economic recovery going forward.
The BoT said in a statement that the Thai economy expanded at a faster pace than market expectations in the fourth quarter of last year and the latest economic indicators also confirmed that the expansion continued into January and become more broad-based, with the improvement in the country’s exports and tourism while private consumption has become close to the pre-crisis level.
Among key supporting factors, said the statement, are higher farm income and consumer confidence, as well as continued impetus from fiscal policy, so the MPC considered that downside risks to growth have declined from the last meeting.
Moreover, it said, the inflation during the past three months has picked up pace, with latest headline inflation in February at 3.7 percent owing to energy and fresh food components, while core inflation remained low and the MPC expects core inflation to rise in line with economic expansion.
The MPC views that the lower downside risk to growth has significantly lessened the need for an exceptionally accommodative monetary policy stance at present, it said.
The statement said, “Given uncertainties surrounding the sustainability of global economic recovery as well as domestic risk factors that could adversely impact consumer and investor confidence, the MPC has decided to maintain the policy interest rate at 1.25 percent per annum, and will consider adjusting the policy interest rate to more normal levels in the periods ahead.”
On April 8 last year, the seven-member MPC had cut the one-day repurchase rate 25 basis points from 1.50 to 1.25 percent and maintained the policy rate during the past meetings.
The MPC, chaired by BoT governor, Dr.Tarisa Watanagase, includes the central bank’s deputy governor for Monetary Stability, Dr.Bandid Nijathaworn, and deputy governor for Corporate Support Services, Dr.Atchana Waiquamdee. Four external members are Dr.Ampon Kittiampon, secretary-general of the National Economic and Social Development Board; Dr.Praipol Koomsup, professor at Faculty of Economics, Thammasat University; Dr.Siri Karncharoendee, former BoT assistant governor; and former commerce minister Krirk-krai Jirapaet.
The MPC, which usually meets every six weeks, is scheduled to meet again on April 21.