Thai central bank keeps policy rate unchanged at 3 per cent

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BANGKOK, May 2 – The Bank of Thailand (BoT) maintains its policy interest rate at 3.00 per cent to support a smooth economic recovery and to keep inflation within target.

The BoT’s Monetary Policy Committee (MPC) voted unanimously to maintain the policy rate when it met Wednesday.

Committee secretary Paiboon Kittisrikangwan said the current policy rate was deemed appropriate to continue supporting the smooth recovery of economic activity to normal levels.

The MPC will closely monitor inflation although inflation in April was slower partly due to the high base of the previous year and the falling back of some fresh food prices to their previous levels.

However, upward inflationary pressure is projected in the period ahead. In the context of a strong rise in domestic demand, higher oil prices and minimum wage in tandem were expected to result in a greater pass-through of higher costs to prices of goods and services, the BoT said in its statement.

The MPC is ready to adjust its policies in response to the current need, Mr Paiboon said.

The committee believed that the recent easing of monetary policy has helped shore up private sector confidence and contributed to a broad-based recovery which has been faster than expected. However, external factors continue to be a major risk to growth while inflation remains manageable.

The real interest rate at the end of April remained at -0.3 per cent, the lowest in the region, with no sign of any stability problems.

Reviewing the country’s economic performance, the committee resolved that key economic figures showed signs of improvement. Capital flow is in balance, due to a stable currency exchange rate.

The BoT will review Thai economic growth forecast on May 11.