BOT holds policy rate, says economy in recovery

[BANGKOK] Thailand's central bank left its key interest rate unchanged at a record low again on Wednesday as Southeast Asia's second-largest economy tries to revive its vital tourism sector.

In efforts to restart tourism, the "Land of Smiles" reopened to vaccinated visitors without quarantine requirements from Nov 1 after more than a year of strict entry restrictions.

The Bank of Thailand's (BOT) monetary policy committee unanimously voted to hold the one-day repurchase rate at 0.50 per cent for a 12th straight meeting, as expected by all 21 economists in a Reuters poll.

The rate was cut three times last year to alleviate the impact of the coronavirus pandemic.

"The Committee assessed that the Thai economy had bottomed out in the third quarter of 2021 and entered the recovery phase following the relaxation of containment measures and the re-opening of the country," the BOT said in a statement after its policy meeting.

However, the fragile economic recovery outlook would still be subject to uncertainties, it added.

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The Thai economy would expand at a pace close to the previous projection for 2021 and 2022 on the back of domestic spending that gradually recovered following the relaxation of containment measures, partially offsetting the adverse impact of higher global energy prices, the BOT said.

In September, the BOT forecast economic growth of 0.7 per cent this year and 200,000 foreign tourists. Next year, it predicted 3.9 per cent GDP growth and 6 million foreign arrivals.

In 2019, nearly 40 million foreign visitors spent US$57.6 billion.

The BOT said the baht was more volatile and it would closely monitor developments in both global and domestic financial markets and continue to work on improving the structural issues in the foreign exchange system.

REUTERS