BANGKOK (Reuters) – Thailand’s central bank left its key interest rate unchanged for a fourth straight meeting on Wednesday, as widely expected, despite public calls by the government to reduce borrowing costs to help revive Southeast Asia’s second-largest economy.
The Bank of Thailand’s (BOT) monetary policy committee voted 6-1 to hold the one-day repurchase rate at 2.50%. One member voted for a 25 basis point rate cut.
“The majority of the Committee deems that the current policy interest rate is consistent with the economy converging to its potential, as well as conducive to safeguarding macro-financial stability,” the BOT said in a statement.
All but three of 27 economists in a Reuters poll had expected the BOT to keep the rate unchanged on Wednesday. The three economists had predicted a quarter-point cut.
Earlier on Wednesday, Prime Minister Srettha Thavisin said he was hoping for a rate cut at the rate meeting, repeating his call for lower rates to help revive the economy, which has lagged regional peers as it confront high household debt and interest rates as well as sluggish exports.
However, Finance Minister Pichai Chunhavajira has said he was more worried about people’s access to credit than interest rates. He said the government is aiming for at least 3% growth this year.
The BOT raised its key rate by 200 basis points to 2.50% over eight meetings between August 2022 and September 2023, taking it to the highest level in more than a decade, and has held steady since then.
The economy expanded 1.9% last year, with average annual growth at 1.73% over the past decade.
The central bank maintained its forecasts for 2.6% GDP growth in 2024 and for 3.0% growth in 2025. Headline consumer inflation in May returned to the BOT’s target range of 1% to 3% for the first time in a year.
The BOT maintained its headline inflation forecast for 2024 at 0.6%, and slightly lowered its core inflation forecast to 0.5% from 0.6% seen earlier.
The next rate review is on August 21.
(Reporting by Orathai Sriring, Kitiphong Thaichareon, Thanadech Staporncharnchai and Chayut Setboonsarng; Editing by John Mair)
Comments