Thailand’s policy rate is very low and liquidity in the banking system is ample and not impeding economic recovery, the central bank governor said, as the country struggles with the effects of a recent spike in coronavirus infections.
Financial measures introduced so far have been sufficient and the central bank is ready to implement more if necessary, Governor Sethaput Suthiwartnarueput said in a video clip posted by the Bank of Thailand’s (BoT) YouTube channel on Wednesday.
The BoT has left its key rate steady at a record low of 0.50% since the middle of last year after three cuts to mitigate the pandemic impact.
It has since focused on relief measures including 350 billion baht of soft loans recently and a so-called “asset warehousing” scheme to help businesses.
However, there has been a problem of liquidity distribution to small and medium enterprises, Mr Sethaput said.
“Large businesses still have access to loans, retail ones are already heavily indebted and what they need is income, not more debt,” he said.
The BoT chief said it would take Southeast Asia’s second-largest economy until the first quarter of 2023 to return to pre-Covid-19 levels and tourism could take “five years plus” to normalise.
The lengthy recovery will increase inequality partly due to very high household debt, which will be a drag on recovery for households, he said.
“We will be out of this crisis … but the recovery will take time and won’t be smooth,” Mr Sethaput said.