BANGKOK (Reuters) – Thailand’s central bank has not shut the door to further monetary policy easing, a deputy governor said, after cutting the key rate three times this year to a record low of 0.5% to support an economy badly hit by the coronavirus outbreak.
The Bank of Thailand has forecast Southeast Asia’s second-largest economy will shrink a record 8.1% this year.
The interest rate direction will depend on the consideration of the monetary policy committee (MPC), Mathee Supapongse said in a recorded interview with television channel INN, aired on Monday.
“It has not closed the door yet… but further policy easing will have both good and bad effects, so it must weigh that well,” Mathee said of the committee, of which he is also a member.
Also, the BOT has absorbed large liquidity in the system, worth trillions of baht, which can be released back, he said.
Mathee said economic indicators had improved in June and an economic recovery in the second half would be mainly driven by domestic spending.
The MPC will next review monetary policy on Aug. 5.
Reporting by Orathai Sriring and Kitphong Thaichareon; Editing by Martin Petty