(Bangkok Post file photo)
The Bank of Thailand (BoT) left its policy rate unchanged at an all-time high for a 13th consecutive meeting on Wednesday, to support an economy dependent on tourism facing new risks of the spread of the Omicron coronavirus variant.
The BoT’s monetary policy committee voted unanimously to keep the overnight repurchase rate at 0.50%, as predicted by 22 economists in a Reuters poll.
While the BoT expected Thailand’s economy to continue to recover, it flagged the risk of the Omicron coronavirus variant spreading.
“The spread of the Omicron variant would be a key risk to the economic outlook and therefore merited close monitoring.” the BoT said in a statement after its political meeting.
After reopening more widely to vaccinated foreign visitors last month, the country reinstated mandatory Covid-19 quarantine on Tuesday and removed a quarantine waiver over concerns about the Omicron variant.
Southeast Asia’s second-largest economy contracted 1.1% in the September quarter compared to the previous quarter as it was battered by another wave of Covid-19, but recent data has shown indicated some improvement as restrictions relaxed.
The BoT slightly raised its economic growth forecast for 2021 to 0.9% from 0.7% expected in September. But he slightly lowered his growth estimate for 2022 to 3.4% from 3.9% previously.
The central bank made three cuts in the first half of 2020 to mitigate the impact of the coronavirus pandemic.
Last month, the finance minister said monetary policy must remain accommodative to support fiscal measures.
Unlike some of the world’s major central banks, the BoT offers itself the luxury of maintaining a loose monetary policy because inflation is still within its target range of 1-3%. Headline inflation was 2.71% in November.
The BoT expects headline inflation of 1.2% this year and 1.7% next year. He had previously forecast 2021 inflation at 1.0% and 2022 inflation at 1.4%.
The central bank predicts that Thailand will receive 280,000 foreign tourists this year and expects that figure to reach 5.6 million in 2022. It expects an 18% increase in exports in 2021, against a previous forecast by 16.5%.