BANGKOK: Thailand's monetary policy committee held its key interest rate steady last month but discussed conditions for policy tightening amid concerns about risks, particularly from the property sector, minutes of the central bank meeting showed on Wednesday.The committee voted 5-2 on Sept. 19 to leave the Bank of Thailand (BOT)'s one-day repurchase rate at 1.50 percent, the same level it has been since April 2015.But two members voted for a quarter-point hike, reinforcing market views that it may start tightening soon.The MPC will next review policy on Nov. 14, when some analysts expect the first interest rate hike since 2011.While the committee felt the current accommodative monetary policy was conducive to economic growth, it felt "should economic expansion continue and inflation move more firmly within the target, the need for currently extra accommodative monetary policy would start to be gradually reduced. "The committee noted signs of increasing vulnerability in the property sector, saying financial institutions competing for mortgage business are willing to bear higher risks, resulting in loosening credit standards.The central bank will hold a briefing on housing lending regulations at 0600 GMT, after Governor Veerathai Santiprabhob said on Tuesday the bank would hold a hearing on mortgage lending standards to curb underpricing of risks in the market.The two dissenting members wanted a 25 basis-point increase to curb financial stability risks that could affect the sustainability of economic growth over the longer term and to start building policy space, the minutes said.The committee also believed the appreciation of the baht relative to those of trading partners' currencies could affect business competitiveness.Though Thailand's economy expanded at a slower pace in the second quarter, the central bank has maintained its 2018 economic forecast at 4.4 percent.

Source: The Star October 03, 2018 03:50 UTC