Thailand’s monetary policy should remain accommodative to bolster an economic recovery that is still weak and uneven, with growth running below potential, according to the minutes of the October policy meeting. The committee underscored that monetary policy’s main role is to manage aggregate demand and safeguard overall economic stability, while fiscal policy and targeted government measures are needed to tackle structural issues such as inequality, constrained SME access to finance, and declining competitiveness.
Members also warned that keeping interest rates low while global monetary policy is tightening could amplify financial stability risks via volatile capital flows, exchange rate fluctuations, and shifts in domestic investor behavior. Even so, they judged Thailand’s external position to be robust, with no significant signs of vulnerability at present.
The board voted to leave the policy rate unchanged, but noted that rising oil prices and the impact of El Niño could add to inflationary pressures and increase cost pass-through, warranting close and continuous monitoring.
