BANGKOK: Thailand’s inflation is likely to come in below the Bank of Thailand’s forecast of 2.8percent this year and ease next year, the central bank governor said on Saturday, adding that monetary policy would remain accommodative and focused on supporting the economy. Monthly inflation in the fourth quarter is now expected to be less than 4.5percent previously projected, and ease next year, allowing the central bank to look through temporary price pressures, Governor Vitai Ratanakorn told reporters.
Headline inflation slowed to 2.42percent in June, remaining within the central bank’s 1percent to 3percent target range and below expectations.
Vitai said last month that there was no need to raise interest rates for now, days after the central bank left its key rate unchanged at 1.00percent. The next monetary policy review is on August 26.
Any further rate reductions would not be easy as the current rate level is already very low, and keeping rates too low could hurt savers and have broader negative impacts, Vitai said.
Southeast Asia’s second-largest economy has been resilient, with the central bank’s 2.3percent growth forecast for this year seen as “not good, but not bad”, Vitai said. The economy expanded 2.4percent last year, lagging regional peers.
The central bank expects to introduce rules around October-November requiring proof of the source of funds for deposits exceeding 5 million baht (USD150,375) to curb illicit funds, Vitai said.
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