August 6, 2018 / 6:31 AM / 12 days ago

POLL-Thai c.bank seen holding key rate again as inflation benign

* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?RIC=THCBIR%3DECI poll data

* All 20 economists see policy rate staying at 1.50 pct

* Inflation remains low, was 1.46 pct y/y in July

* Decision due on Wednesday, Aug 8, at 0705 GMT

By Orathai Sriring

BANGKOK, Aug 6 (Reuters) - Thailand’s central bank is expected to leave its policy interest rate unchanged again on Wednesday to aid economic growth as inflation remains benign and policymakers say capital outflows are not currently a concern.

All 20 economists in the poll predicted the Bank of Thailand (BOT)’s monetary policy committee (MPC), unlike some Asian central banks that have hiked this year, will keep its one-day repurchase rate at 1.50 percent.

That has been the policy rate since April 2015. Thailand’s record low is 1.25 percent.

Growth in Southeast Asia’s second-largest economy has picked up but remains heavily reliant on exports and tourism, as domestic demand has lagged.

Annual headline inflation was 1.46 percent in July, the fourth month inside the BOT’s 1-4 percent target after more than a year below it.

On Friday, Finance Minister Apisak Tantivorawong told Reuters Thailand had no need to raise interest rates this year as capital outflows were not a worry and a weak baht was good for its exports.

Given uncertainty over U.S.-Sino trade tensions and tame inflation, the BOT likely sees “little impetus to tweak rates at this juncture, but adopt a wait-and-see approach to observe growth trends towards end-year,” said Barnabas Gan, economist of OCBC Bank.

RATE HIKE THIS YEAR?

The BOT forecasts 2018 economic growth of 4.4 percent, after last year’s 3.9 percent, the best in five years.

In June, the MPC voted 5-1 to hold the policy rate, with one wanting a 25-basis-point rise.

In the Reuters poll, nine of the 17 analysts who gave a longer-term view predicted no policy rate change the rest of 2018, while eight saw increases, starting from September.

Tim Leelahaphan, economist at Standard Chartered, who still predicts two quarter-point rate rises this year, said “more members may call for a policy rate hike” on Wednesday.

Bank of Ayudhya expects a rate hike in the fourth quarter while HSBC forecasts an increase in 2019’s second quarter.

The BOT’s last hike was in August 2011, a quarter-point increase to 3.50 percent.

Additional reporting by Chinthathip Nanthavong in BANGKOK and Shaloo Shrivastava in BENGALURU; Editing by Richard Borsuk

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