BANGKOK: Thailand’s central bank has turned slightly more optimistic about how fast the country will grow this year while leaving its key interest rate at same low level it has been since April 2015.
As expected, the Bank of Thailand (BOT)’s Monetary Policy Committee on Wednesday voted unanimously to keep the one-day repurchase rate at 1.50%, a quarter-point above the record low.
The BOT continues to count on government spending to support economic growth, which has lagged regional peers, as Southeast Asia’s second-largest economy continues to face global risks and high household debt at home.
Thailand’s military government has ramped up investment to try to lift domestic activity, as pivotal exports are just recovering.
The growth outlook has improved due to better exports “while domestic demand continues to expand at a gradual pace and is not yet sufficiently broad-based,” the MPC said.
But the improved growth outlook is “still subject to external risks”, it said, citing policies of the United States policies and other factors.
The committee said monetary conditions remained accommodative and conducive to growth with ample financial system liquidity.
It said recent movements in the baht were in line with regional currencies, and the BOT would continue to monitor short-term capital flows.
The baht has gained more than 5% against the dollar this year, making it Southeast Asia’s best performing currency.
All 22 economists polled by Reuters forecast no policy change on Wednesday, and most who gave a year-end projection saw the BOT holding rates through 2017.
