Thai central bank in no rush to raise rates

Bangkok

THAILAND'S central bank is under no immediate pressure to raise interest rates like emerging-market peers elsewhere given the nation's solid buffers and relatively strong currency, governor Veerathai Santiprabhob said.

The Bank of Thailand is monitoring economic developments closely, including risks to the growth outlook from trade protectionism, Mr Veerathai said in an interview with Bloomberg Television's Haslinda Amin on Wednesday in Bangkok.

While inflation returned to the one percent to 4 per cent target range, it remains subdued, he said.

"With our strong external position, the need for Thailand to increase the policy rate is not as imminent as other emerging markets," he said. "We have strong enough buffers so we are not under pressure as other emerging markets that might be vulnerable to the global financial conditions. So we can utilise our monetary policy autonomy to meet the needs of the Thai economy."

Mr Veerathai struck a more dovish tone than last week when he said the central bank is waiting for the right time to consider an interest-rate hike, prompting some analysts to bring forward their calls for a policy move to later this year. The Bank of Thailand has kept its benchmark rate at 1.5 per cent, near a record low, since 2015, in contrast to counterparts in Indonesia, the Philippines and others, which have tightened policy this year in the face of currency turmoil.

Thailand's US$203 billion in foreign-exchange reserves, and a current-account surplus of about 8 per cent of gross domestic product, have sheltered it from the worst of the emerging-market rout that's hit its neighbours.

The baht has advanced 1.7 per cent against the dollar this month, the best performer among 22 emerging currencies tracked by Bloomberg. BLOOMBERG