UPDATE 2-Bank of Thailand, resisting govt pressure, holds rates
* C.bank keeps policy rate at 2.75 pct, as expected
* Says inflation pressures increased slightly
* Says it will closely monitor capital inflows
* Many economists expect no policy change all year
(Adds details, economists' comments)
BANGKOK, Feb 20 (Reuters) - Thailand's central bank left its benchmark interest rate unchanged at 2.75 percent for a third straight meeting on Wednesday, resisting government pressure to cut it and saying the economy could grow more than forecast this year.
The Bank of Thailand (BOT) said it saw risks from credit growth and a slight increase in inflationary pressure, which economists said suggested further policy easing was unlikely.
The BOT said its seven-member monetary policy committee (MPC) - on which central bank officials only have three seats - voted six to one in favour of leaving the one-day repurchase rate unchanged. But its statement showed one member felt that risks stemming from volatile capital flows and "fragile economic momentum" warranted a quarter-point cut.
Most economists think the policy rate will remain on hold for the rest of the year, although a few had been looking for a cut before Wednesday's statement, while others forecast an increase because of inflation risks later in the year.
Santitarn Sathirathai, an economist of Credit Suisse in Singapore, said: "The central bank's statement is slightly more hawkish than expected ... We think the rate will stay on hold at 2.75 percent due to strong economic growth but also the household debt issue, which wasn't in the statement today."
"Credit growth has been strong and there are worries about that which will impact the decision to keep the rate on hold."
Thirteen of 17 economists polled by Reuters had expected the rate to be left at 2.75 percent.
Despite strong economic data this week, the other four had forecast a quarter-point cut, partly because of pressure from Finance Minister Kittirat Na Ranong, who argued that would deter "hot money" from abroad that is pushing up the baht and may hurt exports.
The baht has risen around 2.7 percent this year, making it emerging Asia's strongest currency. It briefly rose to 29.78 per dollar after the decision, up 0.3 percent from Tuesday and stood at 29.81 as of 0913 GMT.
This month, Kittirat said he had written to the central bank - which historically has zealously guarded its independence from government - to press his case for a rate cut.
There was no word from Kittirat after the decision, but Prime Minister Yingluck Shinawatra told reporters she had asked him to talk to the central bank governor about how to ease the impact of the baht's rise on the economy.
Su Sian Lim, ASEAN economist for HSBC, wrote that Wednesday's hold was an important message to markets that the MPC continues to make decisions rationally and that "it remains credible and independent."
On Wednesday, the Thai cabinet instructed state enterprises to quickly repay foreign debt to spur outflows to offset the baht's strength.
The policy committee said it would closely monitor risks to financial stability as well as the capital flow situation and that it stood ready to take action as appropriate.
"The economy is expected to grow faster than previously projected in the periods ahead, with domestic demand being a key growth driver together with a gradual recovery of exports," its statement said. "Inflationary pressure has risen somewhat, as a result of an increase in oil prices."
ROOM FOR RATE RISE?
Gundy Cahyadi, an economist at OCBC Bank in Singapore, said the statement was "slightly biased to the hawkish side" and he continued to see room for rate rises later this year.
To many economists, there are no grounds for further rate cuts after Southeast Asia's second-largest economy grew a much stronger-than-expected 3.6 percent in the final quarter of 2012 from the previous three months.
The annual growth rate in October-December, exaggerated by the low base a year earlier when floods devastated the economy, was a record 18.9 percent.
For all of 2012, the economy grew 6.4 percent. The central bank's forecast for 2013 - which it hinted it might raise - is 4.9 percent.
Economists are worried about price pressure later this year, meaning interest rate rises may be needed to curb inflation, which some say could be as high as 5 percent.
The BOT has forecast headline inflation of 2.8 percent for 2013, with core inflation, which strips out food and energy prices, at 1.7 percent, well within its target range of 0.5-3.0 percent that guides monetary policy.
Thammarat Kittisiripat, an economist with TMB Bank, said: "A rate hike is possible late in the year, due mainly to oil prices, while wage increases could help accelerate inflation."
A daily minimum wage of 300 baht ($10) became effective across the country in January, a rise of 26 percent on average around the provinces after a nationwide jump of 40 percent last April.
Given global woes and benign inflation, Asian central banks have been keeping monetary policy easy to help their economies.
South Korea left interest rates on hold for a fourth straight month on Feb. 14 and Indonesia has been on hold since February 2012.
(Additional reporting by Amy Sawitta Lefevre and Paul Carsten; Editing by Richard Borsuk and Alan Raybould)