[BANGKOK] Thailand’s central bank left its key interest rate steady on Wednesday (Oct 8), counter to market expectations for a cut as the economy struggles with a strengthening baht, negative inflation and US tariffs.
The Bank of Thailand’s (BOT) monetary policy committee voted five to two to keep the one-day repurchase rate steady at 1.50 per cent after a quarter-point reduction at the previous meeting in August.
Only six of 26 economists in a Reuters poll had predicted rates would be kept steady this week. Nineteen had predicted a 25 basis point cut, and one forecast a 50 basis point cut.
Among those who provided a longer-term outlook on rates in the poll, 13 of 21 economists expected the policy rate to stand at 1.25 per cent by the end of 2025. The remaining eight saw it at 1 per cent.
“The Committee assesses that monetary policy should be accommodative to support economic recovery. The transmission of previous policy rate cuts to the economy is ongoing,” the central bank said in a statement.
The BOT now expects the economy to grow 2.2 per cent this year and 1.6 per cent in 2026, slightly lower than its previous forecasts of 2.3 per cent and 1.7 per cent, respectively. Last year’s growth was 2.5 per cent.
South-east Asia’s second-largest economy has lagged peers as it struggles with US tariffs, high household debt, weak consumption, and a strong currency.
Wednesday’s policy review was the first for new governor Vitai Ratanakorn. REUTERS
