Thailand votes to maintain policy rate at 2½% amid stabilization

By Jennifer Chiou

New York, Oct. 16 - The Monetary Policy Council of the Bank of Thailand voted unanimously at its Wednesday meeting to keep the policy rate unchanged at 2½% as the council assessed that the Thai economy is stabilizing and should gradually recover, according to a bank press release.

One councilmember was absent.

In the release, committee secretary Paiboon Kittisrikangwan said that the global economy improved gradually, though with substantial downside risks, and the U.S. economy expanded at a moderate pace on the back of private consumption.

While the impact of the U.S. government shutdown should be limited, failure to lift debt ceiling poses a substantial risk to global financial and economic stability, the council said.

The Thai economy grew more slowly than previously assessed, but began to stabilize and showed signs of improvement in some sectors, the release noted. Exports began to recover in line with better global demand, while private consumption and investment have stabilized.

Key downside risks stem from uncertain global economic recovery as well as a delay in fiscal disbursement especially for infrastructure projects, the release added. Inflation edged lower in line with subdued production costs and domestic demand.

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