BoT holds rate steady amid unease

Panel wants to save its ammunition

- WICHIT CHANTANUSORNSIRI NAREERAT WIRIYAPONG

The Bank of Thailand's Monetary Policy Committee (MPC) must conserve financial ammunition to support the economy, which is expected to slow in the near future, says Sakkapop Panyanukul, the MPC's secretary.

He made the remark after the third MPC meeting of the year yesterday, where the committee voted 6-1 to maintain the policy rate at 1.75%. One member voted to cut the policy rate by 0.25 percentage points to 1.50%.

"The timing of an interest rate cut is crucial because we don't have much ammunition left. We need to thoroughly consider how to use the remaining policy space as effectively as possible," said Mr Sakkapop.

However, he said the committee is ready to adjust policy if the situation changes.

Mr Sakkapop said the issues that warrant monitoring include the growth and quality of credit, and whether the lending behaviour of commercial banks aligns with economic conditions. Although this is not yet a concern, he said the impact of the trade war will require monitoring.

Regarding the effects of political squabbling, this was not included in the baseline estimate as developments remain uncertain.