Thai central bank says rates could change if economic outlook shifts

BANGKOK : Thailand’s central bank could adjust interest rates if the outlook for the economy and inflation changes, but rates are not a key factor for boosting the economy, a deputy governor said.

The Bank of Thailand’s inflation target range of 1 per cent to 3 per cent is still appropriate for now, Deputy Governor Alisara Mahasandana said in comments on a recorded local media programme posted on Wednesday.

Headline inflation is expected to return to within the target range in the fourth quarter of 2024, she added.

The central bank last month left its key interest rate at a more than decade-high of 2.50 per cent. The next rate review is on June 12.

Alisara said any rate adjustments would depend on the economy, inflation and financial stability, rather than moves by the U.S. Federal Reserve.

The central bank wants the baht to move in line with market forces but would take action on any excessive move in the currency, she added.

Annual first-quarter growth of 1.5 per cent came in better than the central bank had expected, with good momentum, Alisara said.

The central bank has forecast growth of 2.6 per cent this year, after last year’s 1.9 per cent growth.

Prime Minister Srettha Thavisin has called for the central bank to cuts rates to help Southeast Asia’s second-largest economy, which has lagged regional peers.

New Finance Minister Pichai Chunhavajira has recently said he is more worried about people’s access to credit than the level of interest rates, however.

The central bank has previously said that rate cuts and fiscal stimulus would not help the economy much, and it favoured structural reforms to increase productivity.

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