Monetary Policy Committee Ready to Work with Finance Ministry
After a meeting to discuss economic data yesterday, the MPC released a statement late in the evening saying “the committee agreed on the need for a timely implementation of appropriate policy mix as warranted by circumstances, in close coordination with the Ministry of Finance and others”.
Despite the appreciation of the baht, the committee expects the economy to remain resilient.
“The MPC has concerns over recent volatility and rapid appreciation of the baht, which at times have not been justified by economic fundamentals,” it said in the statement.
The MPC is under pressure from the Finance Ministry and exporters who want it to implement measures to weaken the baht. The Federation of Thai Industries (FTI) chairman Payungsak Chartsutthipol has called on the MPC to cut its policy interest rate from 2.75% by 1% to weaken the baht.
He said the central bank will use foreign exchange and capital inflow management as the main instruments to keep the baht from rising too high.
He said the FTI has cut its forecast for Thailand’s export growth this year from 6.9% to 4.92%, causing a loss of US$47.5 billion in export value, based on an exchange rate of 28.90 baht/US$.