Thailand’s central bank kept its benchmark interest rate steady at 1.00% on Wednesday, citing persistent economic headwinds despite a recent inflation uptick.
The Bank of Thailand’s decision to hold the policy rate at 1.00% matched expectations from 30 of 32 economists surveyed by LSEG. Two economists had anticipated a 25 basis point increase. The move follows a 0.2% quarter-on-quarter contraction in second-quarter GDP, which the central bank noted alongside a slowdown in annual growth to 1.9% from 2.8% in the prior quarter.
The central bank’s statement emphasized weak domestic demand and external uncertainties as key factors influencing its decision. Inflation, which has edged higher in recent months, remains within the bank’s target range, providing scope for maintaining accommodative policy settings.
The benchmark rate has been held at 1.00% since August 2023, following a cumulative 75 basis point reduction in the prior year. The Bank of Thailand has signaled a cautious approach to policy normalization, prioritizing support for economic recovery amid uneven growth momentum.
