Bank of Thailand MPC Member Says Policy Decisions Data Dependent

(Bloomberg) -- The Bank of Thailand’s monetary policy is data dependent with an eye on financial stability as well as the tough export outlook, according to an official who helps to decide the country’s benchmark interest rate.

“We’re open to all possibilities,” Somchai Jitsuchon, a member of the central bank’s monetary policy committee, said in an interview. He also said the “U.S.-China trade war has haunted us” and may hang over the country for a long time if President Donald Trump wins a second term.

Growth in Southeast Asia’s second-largest economy slumped to a four-year low last quarter, in part as exports tumbled. Thailand’s shipments of items such as automotive and electrical parts feed into China’s supply chain, exposing it to the fallout from the tension between the world’s two largest economies.

The central bank has left its key rate unchanged since a hike in December to 1.75%, the first increase since 2011. It has previously said that policy will be guided by economic reports amid heightened uncertainty.

Moderating tourism is another of the challenges facing the Thai economy, Somchai said in the June 14 interview. Domestic demand is providing some momentum but would fizzle eventually if the overall slowdown drags on, he said.

The investment outlook is better, with the new Thai government expected to continue the $54 billion development plan for the eastern seaboard, Somchai said. More firms may pick Thailand for a manufacturing base to skirt U.S. tariffs on China, he said.

Somchai is one of seven members of the monetary policy committee and is also a research director at the Thailand Development Research Institute. The next central bank policy decision is due on June 26.

To contact the reporter on this story: Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net

To contact the editors responsible for this story: Sunil Jagtiani at sjagtiani@bloomberg.net, Steve Geimann

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