Thai central bank says financial stability needs closely monitoring

The central bank said on Friday that Thailand's financial system is resilient but stability could be affected by a sudden change in the global financial market, which warrants close monitoring.

It said that if the global economy goes into recession and deters Thailand's economic recovery, there may be deterioration in debt serviceability of households and smaller businesses.

The Bank of Thailand's BOT statement detailed the outcome of Tuesday's meeting between the monetary policy and financial institutions policy committees.

Financial institutions could be affected by higher volatility of risky asset and funding costs of the corporate sector due to global uncertainty, it said.

The committees agree that regulatory authorities must collaborate closely to monitor situations and prepare measures to ensure the continued functioning of the financial market in times of stress, the central bank said.

The Thai economy is expected to continue on a steady recovery path, and the BOT's gradual and measured monetary policy tightening has been consistent with the economic environment, it said.

The BOT has raised its key interest rate by 75 basis points in three meetings since August to contain inflation.