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Asia, Forex

Thai says financial stability remains a concern

BANGKOK, Aug 13 (Reuters) – Thailand’s central bank is still concerned about financial stability after last week’s interest rate cut, its governor said on Tuesday, adding that a new joint policy committee will have no impact on the central bank’s monetary decisions.

“We still give importance to financial stability and will need to adopt measures to take care of it, particularly at a time of lower interest rates,” Veerathai Santiprabhob told reporters. He did not give further details.

Last week, the Bank of Thailand’s monetary policy committee unexpectedly voted 5-2 to cut the key interest rate by a quarter point to 1.50%. Two dissenters favoured no policy change.

Veerathai said the rate cut was due to the increasing impact of escalating trade protectionism on Thailand’s trade-driven economy and on lower fuel prices that could pull inflation below target this year.

He also said the establishment of the committee to discuss fiscal and monetary policy will have no impact on the central bank’s decision-making as it will only serve as an advisory council.

Finance Minister Uttama Savanayana said on Friday there will be no interference in the central bank’s policy.

Later on Tuesday, Industry Minster Suriya Juangroongruangkit will meet Veerathai to discuss the strength in the baht.

The baht is Asia’s best performing currency, up around 5.8% against the dollar so far this year. (Reporting by Kitiphong Thaichareon Writing by Orathai Sriring Editing by Jacqueline Wong)

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