Bank of Thailand Open to More Policy Easing in Pandemic

Residents affected by the coronavirus pandemic queue up for food donations in Phitsanulok province on April 25, 2020,

BANGKOK (Xinhua) — The Bank of Thailand (BoT) on Monday said that it has not shut the door to further monetary policy easing, after cutting the key rate three times this year to a record low of 0.5 percent to help support the Thai economy impacted by the COVID-19 pandemic.

The BoT had previously forecast the Thai economy will shrink a record of 8.1 percent this year.

“Further cuts will depend on the BoT’s monetary policy committee (MPC), however the BoT is not shutting its door to further easing as yet,” said Mathee Supapongse, BoT Deputy Governor, “Further easing will have both good and bad effects, so it must weigh that well.”

Mathee said there is a possibility of further easing by the BoT as the latter had absorbed large liquidity in the system, worth trillions of baht, which can be released back.

“The economic indicators had shown improvements in June and an economic recovery in the second half would be mainly driven by domestic spending,” said Mathee.

He said that the next MPC meeting on monetary policy is scheduled on August 5.