Bangkok, Oct 28 – Thailand’s central bank governor, Sethaput Suthiwartnarueput, has stated that the current policy rate is well-suited for the country’s economy. However, he also emphasized the bank’s readiness to make adjustments if necessary, citing increased global risks and concerns over the ongoing conflict in the Middle East.
Sethaput Suthiwartnarueput addressed reporters on Saturday, noting that despite the global challenges, Southeast Asia’s second-largest economy is still expected to achieve close to its forecasted growth rate of 2.8% for this year, although third-quarter growth might be slightly softer than anticipated. The central bank’s growth projection for 2024, set at 4.4%, could be subject to revision in response to any changes in the government’s stimulus plan. Last year, Thailand’s economy recorded a growth rate of 2.6%.
Governor Sethaput expressed particular concern about the repercussions of the ongoing conflict in the Middle East, stating, “A new factor that I’m quite wary about is Middle East problems, as evaluating the impact of this risk is very difficult.” However, he affirmed that the current policy rate remains appropriate. “The rate is appropriate for this period,” he said. “But if the situation changes significantly from our forecasts, our set framework, there will be adjustments.”
Just last month, the Bank of Thailand’s monetary policy committee surprised markets by raising the key interest rate by a quarter point to 2.50%, marking the highest level in a decade. The decision was justified by expectations of stronger growth and increased inflation in the coming year. The next policy review is scheduled for November 29.
To combat elevated inflation, the central bank has already raised interest rates by a total of 200 basis points since August of the previous year. The Thai baht has exhibited higher volatility compared to its counterparts due to external factors and substantial capital outflows from the country, according to the governor. Since the beginning of the year, the baht has depreciated by approximately 4.4% against the U.S. dollar, with capital outflows totaling 308 billion baht ($8.53 billion).
While challenges persist on the economic front, Thailand remains resilient and adaptable. The central bank, in close coordination with the government, continues to monitor the evolving situation and stands prepared to take action as needed to ensure stability and sustainable growth.
Source: [Reuters]
