Thailand Keeps Key Interest Rate Unchanged

(RTTNews) - Thailand's central bank decided to keep the interest rate unchanged on Wednesday despite rising pressure to cut the rate to support economic growth.

The Monetary Policy Committee of the Bank of Thailand voted 5-2 to hold the policy rate at 2.50 percent.

Two members sought to cut the policy rate by 25 basis points to reflect a lower potential growth amid structural challenges.

"The current policy interest rate is consistent with preserving macro-financial stability, a key foundation for sustainable growth in the longer term," the bank said in the statement.

Amid softening global demand and moderating growth in China, exports and manufacturing activity would drag economic growth this year, the bank observed.

Moreover, structural headwinds are restraining merchandise exports and tourism more than expected.

However, domestic demand would continue to be the key driver of the economy, the bank said. GDP growth outlook was lowered to 2.5-3.0 percent this year.

Inflation is forecast to stabilize at levels close to 1 percent in 2024 before gradually picking up next year. Inflation outlook was lower than the previous assessment due to supply factors. With growth set to remain weak and inflationary pressures very subdued, the central bank is likely to loosen monetary policy later in the year, Gareth Leather, an economist at Capital Economics, said.