Thai inflation likely below 2.8% this year, policy to remain accommodative, central bank chief says 


BANGKOK (Reuters): Thailand's inflation is likely to come in below the Bank of Thailand's forecast of 2.8% this year and ease next year, the central bank governor said on Saturday, adding that monetary policy would remain accommodative and focused on supporting the economy.

* Monthly inflation in the fourth quarter is now expected to be less than 4.5% previously projected, and ease next year, allowing the central bank to look through temporary price pressures, Governor Vitai Ratanakorn told reporters.

* Headline inflation slowed to 2.42% in June, remaining within the central bank's 1% to 3% target range and below expectations.

* Vitai said last month that there was no need to raise interest rates for now, days after the central bank left its key rate unchanged at 1.00%. The next monetary policy review is on August 26.

* Any further rate reductions would not be easy as the current rate level is already very low, and keeping rates too low could hurt savers and have broader negative impacts, Vitai said.

* Southeast Asia's second-largest economy has been resilient, with the central bank's 2.3% growth forecast for this year seen as "not good, but not bad", Vitai said. The economy expanded 2.4% last year, lagging regional peers.

* The central bank expects to introduce rules around October-November requiring proof of the source of funds for deposits exceeding 5 million baht ($150,375) to curb illicit funds, Vitai said.

($1 = 33.25 baht) (Reporting by Kitiphong Thaichareon, Writing by Orathai Sriring; Editing by Kim Coghill) -- Reuters

 

 

 

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