Thai CB Plays Cool

While Turkey is stoking the heat at emerging-market central banks already pressured by global monetary-policy tightening, Thailand is playing it cool, Reuters reported. Countries such as Indonesia and India were already raising interest rates as their currencies weakened, even before Turkey’s travails fanned talk of contagion. Thailand, in contrast, is proving more resilient, aided by flush foreign reserves, baht stability and benign inflation amid steady growth. That is giving Thai policymakers a degree of comfort even as some developing-world counterparts struggle. Thailand is tied for the second-least vulnerable of 19 emerging-market economies based on current account, external debt, inflation and government effectiveness, according to a Bloomberg Economics analysis. The Bank of Thailand for much of this year expressed a no-rush view on hikes even as Federal Reserve tightening forced some other nations to follow the US lead. Thai officials have signaled the possibility of lifting borrowing costs from the near-record-low of 1.5%, but that is more to create policy space for future downturns rather than because of what is happening in the US or the Turkey fallout.