The Bank of Thailand is ready to act if the economy slows down sharply, Central Bank governor Veerathai Santiprabhob said on Thursday, while some analysts worry a stronger baht will hurt the economy.
Speaking to a group of analysts on the monetary policy and economic situation, Veerathai said the current policy rate at 1.75 per cent is accommodative to economic growth which is expected to expand 4 per cent this year.
“If the economic growth is sharply slower, then the central bank has tools to address it,” he said.
Although the global economy is slowing down, unemployment rates in the US and Europe remain low and the US economy is still creating new jobs, he said.
Many analysts, however, have expressed concern that a stronger baht would hurt Thailand's exports. They also want the central bank to give a clear signal it will slow down the pace of rate hikes in the future after the BOT raised the rate in December last year. They feared that further rate hikes would deepen the economic slowdown.