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Thai Central bank unfazed by pressure from the government
The Bank of Thailand has refused to convene a special meeting to discuss lowering the policy interest rate, despite pressure from the Prime Minister and the business sector.
The Bank of Thailand defended its decision to maintain the policy rate at 2.50%, stating that it was based on the principle of not hindering economic growth, financial stability, or the inflation framework.
- The Bank of Thailand has refused to convene a special meeting to discuss lowering the policy interest rate, despite pressure from the Prime Minister and the business sector.
- The central bank is cautious about reducing the policy interest rate, citing potential risks to the economy and emphasizing the need for a prudent approach.
- The negative inflation rate is attributed to temporary measures aimed at controlling and reducing oil and energy prices, and the central bank expects it to gradually climb back to its target range.
The central bank of Thailand has refused to lower its policy interest rate, despite pressure from the government and business sector.
This decision was in response to the Prime Minister’s comment that the policy rate is too high and does not match the declining inflation rate. However, the central bank stated that it has adjusted the policy rate gradually in line with advanced economies and aims to align with the global interest rate trend.
The Bank of Thailand has stated that the negative inflation rate over the past three months does not necessarily indicate a poor economy. According to the bank, this can be attributed to the government’s temporary measures aimed at controlling and reducing oil and energy prices.
There are disagreements between the central bank and the Prime Minister over macroeconomic policies, with the bank leaning towards maintaining or increasing the policy rate to prevent economic overheating. The bank expects the negative inflation rate to persist temporarily before gradually climbing back to its target range. Additionally, the bank is advising commercial banks to exercise caution before raising loan interest rates for small borrowers and to consider increasing deposit interest rates.
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