Thailand holds interest rate as growth forecasts lowered

Bloomberg

The Bank of Thailand held its benchmark interest rate steady at an all-time low and cut its forecasts for economic growth, saying it was gauging whether further efforts were needed to restrain the local currency.
The central bank kept its policy rate at 1.25% on Wednesday in a unanimous decision. All 23 economists in a Bloomberg survey predicted a hold after two rate cuts earlier this year.
“A key takeaway from this meeting is that the central bank’s primary reaction function in the near term will be the Thai baht,” HSBC Holdings Plc economist Noelan Arbis said after the decision. Concerns about baht strength “were more prominent at today’s meeting than concerns regarding growth or inflation.”
Authorities have been struggling to temper gains in the currency, which has climbed more than 8% against the dollar over the past year, hurting Thailand’s export-oriented economy. Aside from rate cuts, the central bank has imposed measures to counter short-term inflows and relaxed rules to spur outflows.
Bank of Thailand Assistant Governor Titanun Mallikamas told reporters the Monetary Policy Committee will monitor how the baht responds to those steps and decide if it needs to do more. The currency fell slightly after the decision, from 30.243 to the dollar to 30.264, while local equities were little changed.

Slow Ride
Thailand is on track for its slowest economic growth since 2014, facing headwinds including the US-China trade dispute and political uncertainty. Inflation remains well below the 1%-4% annual target, prompting the central bank to propose narrowing the range next year.