Bank of Thailand ‘ready to act’ if growth disappoints

Bloomberg

The Bank of Thailand is prepared to use monetary policy if economic growth disappoints, its governor Veerathai Santiprabhob said.
“In the short term, we are ready to use monetary policy if needed,” Veerathai said during a visit to Laos. “We are ready to act if growth fails to meet our expectations.”
At the same time, he cautioned against taking the benchmark interest rate below zero, saying that “the key rate shouldn’t be negative, as it will create lots of structural problems.”
The Bank of Thailand cut borrowing costs earlier this month to 1.25% — the second reduction in three months — and eased rules on capital outflows to blunt the local currency’s appreciation. The baht is Asia’s best-performing currency after gaining more than 9% against the dollar over the past year.
The recent surge could be pushing the currency beyond what fundamentals dictate, and the exchange rate is likely to become more volatile, the governor said.
Currency strength and the US-China trade war have pressured Thailand’s economy, which the national economic council said will expand 2.6% this year, the slowest pace since 2014.
Veerathai said the central bank is concerned about baht strength and is monitoring the situation closely as the year-end approaches.