Thai central bank seen holding key rate again on Wed: poll

[BANGKOK] Thailand's central bank is expected to leave its policy interest rate steady on Wednesday for a seventh straight meeting, letting fiscal policy take the lead in supporting the sluggish domestic economy, a Reuters poll showed.

In the poll, 26 of 28 analysts forecast the one-day repurchase rate would be kept at 1.50 per cent when the monetary policy committee (MPC) meets on March 23.

Two predict a 25 basis-point cut to 1.25 per cent, citing weak demand at home and abroad. That would match a record low seen during the global financial crisis.

Bank of Thailand governor Veerathai Santiprabhob said this month fiscal policy was a more effective tool than monetary policy.

Annual headline consumer prices have dropped for more than a year, giving policymakers leeway to keep interest rates low.

At its last meeting on Feb 3, the MPC voted unanimously to hold the rate, saying monetary policy remained accommodative.

Mr Veerathai said the central bank would lower its 2016 GDP growth forecast from 3.5 per cent due to increased risks. The bank will review economic forecasts on Wednesday but not disclose them until March 31.

The economy grew 2.8 per cent last year, picking up from 0.8 per cent in 2014 but its recovery remains fragile.

REUTERS