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MNI STATE OF PLAY: Bank Of Thailand Upgrades 2022 Growth

MNI (Sydney)
SYDNEY (MNI)

The board was in full agreement on holding rates steady.

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The Bank of Thailand has maintained its 2021 growth forecast at 0.7%, while revising its outlook for 2022 up to 3.9% on Wednesday after keeping its benchmark steady.

With Thailand's economy gradually re-opening after the pandemic, the BoT is looking to domestic spending and improved confidence to drive the recovery while tourist numbers are expected to take longer to recover.

The 3.9% growth forecast for 2022 is a return to the previous outlook for the BoT, which revised the forecast lower to 3.7% at its last meeting.

UNANIMOUS DECISION

The central bank voted unanimously to maintain the one-day repurchase rate at a record low of 0.50%, a change from the August meeting when two members of the Monetary Policy Committee voted for a rate cut as the economy struggled with the lockdowns.

In its statement today, the BoT said it believed financial measures would be more effective than a further reduction in the policy rate, which it noted was already low. The BoT noted that the baht was volatile against the USD and put this down to monetary policy developments in advanced economies as well as uncertainties over the Thai economy.

The BoT said it would monitor the baht, which fell just under 2.5% in September to around 33.8 to the USD, and "continue to expedite the new foreign exchange ecosystem."

Monetary policy would remain accommodative, and the bank called on financial institutions to accelerate debt restructuring. The BoT last month relaxed loan classifications to prompt debt restructuring between banks and borrowers.