BANGKOK: Thailand keeps its interest rate frozen for the seventh consecutive meeting as policymakers believe the economy will benefit from the stimulus measures initiated by the country’s military government.
The Bank of Thailand kept its one-day bond repurchase rate at just 1.5 percent with committee members all voting in favour, the bank said in a statement on Wednesday.
Prime Minister Prayuth Chan-Ocha’s cabinet also on Tuesday approved an additional 70 billion baht ($2 billion) to support the housing market, with loans available to developers and low income earners, adding to a series of stimulus measures in recent months aimed at boosting consumption in rural areas. Governor Veerathai Santiprabhob said that fiscal policies will do more to boost domestic demand than lower borrowing costs.
“With fiscal policies coming in full force, it’s not necessary for the central bank to cut rates further”, Somprawin Manprasert, chief economist at Bangkok-based Bank of Ayudhya Pcl, said before the decision.
“Fiscal policies are more effective in this situation and borrowing costs are already low. The economy should improve in the second half, supported by government stimulus measures and infrastructure investments”.
