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Bank of Thailand holds interest rate, says policy accommodative

[BANGKOK] Thailand kept its key interest rate unchanged for a seventh straight meeting, refraining from joining global central banks in easing monetary policy to spur economic growth amid dwindling inflation.

The Bank of Thailand held its one-day bond repurchase rate at 2 per cent, with monetary policy committee members voting five-to-two in favor, it said in Bangkok on Wednesday.

Sixteen economists surveyed by Bloomberg News predicted the decision, while six forecast a quarter of a percentage point cut.

The Thai central bank in December cut its forecasts for exports and gross domestic product growth this year, and has kept the key rate unchanged since last March, while Singapore on Wednesday became at least the ninth economy to ease policy this month.

The Thai monetary authority said on Wednesday the current interest rate is accommodative and that inflation may pick up in the second half of the year.

"The central bank may still find it a little hard to justify a cut," Gundy Cahyadi, an economist at DBS Group Holdings Ltd, said before the decision.

"The key to recovery this year is fiscal spending. Another rate cut may do little to boost economic growth."

The central bank switched to headline inflation to guide monetary policy at the start of 2015 after having used the core measure, which excludes fresh food and fuel, since 2000.