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Monetary Policy Committee Maintains the Policy Rate at 1.50 Percent

The Bank of Thailand’s Monetary Policy Committee voted 5 to 2 to maintain the policy rate at 1.50 percent. Two members voted to raise the policy rate by 0.25 percentage point from 1.50 to 1.75 percent.

Secretary of the Monetary Policy Committee Jaturong Jantarangs announced the outcome of the meeting of the committee on 19 September 2018, saying that, in deliberating their policy decision, the committee assessed that the Thai economy continued to gain traction, driven by both domestic and external demand.

Headline and core inflation were projected to increase broadly in line with the previous assessment. Overall financial conditions remained accommodative and conducive to economic growth. Financial stability remained sound overall, but it was deemed necessary to monitor risks that might lead to the buildup of vulnerabilities in the financial system in the future, especially those resulting from the prolonged period of monetary accommodation.

The committee viewed that the current accommodative monetary policy stance remained conducive to the continuation of economic growth and was appropriate given the inflation target. Thus, most members decided to keep the policy rate unchanged at this meeting.

Nevertheless, two members viewed that the continued economic expansion was sufficiently robust and that prolonged monetary accommodation induced households and businesses to underestimate potential changes in financial conditions, and thus voted to raise the policy rate at this meeting in order to curb financial stability risks that could affect the sustainability of economic growth over the longer term and to start building policy space.

Source: National News Bureau of Thailand (NNT) National News Bureau & Public Relations :