Thai central bank governor says accommodative policy needed

Bloomberg

Thailand’s monetary policy should remain accommodative to nurture the economic recovery and as inflationary pressure remains weak, central bank Governor Veerathai Santiprabhob said.
Thailand is still in the “early stage of a recovery of domestic demand,” Veerathai said in an interview with Bloomberg TV in Singapore. The most important factor in deciding policy is inflation pressure, followed by the strength of the economic recovery and financial stability, he said.
The Bank of Thailand’s first dissenting vote on an interest-rate decision in almost three years last week sparked speculation over whether it’s edging closer to boosting near record-low borrowing costs. Obstacles to an increase in the policy rate, which has been at 1.5 percent since 2015, include below-target inflation and the export-reliant economy’s surging currency.
One of seven monetary policy committee members on March 28 voted for a 25 basis-point hike, while the rest called for no change. The split followed comments by Deputy Governor Paiboon Kittisrikangwan at the start of March suggesting that the central bank should start thinking about policy normalisation.
Inflation has missed the central bank’s target range of 1 percent to 4 percent for the last three years. The monetary authority expects to achieve the goal in the second quarter. Veerathai also weighed in on the ongoing US-China trade skirmishes, noting that while the direct impact on the Thai economy “so far has been quite small,” further retaliation could cause a “quite large” disruption on the regional supply chain.