Thai central bank holds key rate at 2.50%
A rate cut is not expected until the second quarter of 2025
THAILAND’S central bank left its key interest rate unchanged for a fifth straight meeting on Wednesday (Aug 21), as widely expected, despite a sluggish economy and fiscal policy uncertainty after a court dismissed the prime minister.
The Bank of Thailand’s (BOT) monetary policy committee voted 6-1 to hold the one-day repurchase rate at 2.50 per cent, the highest in more than a decade.
All but three of 27 economists in a Reuters poll had expected the BOT to keep the rate unchanged this week. Three economists had predicted a quarter-point cut.
The median forecast in the poll was that a rate cut is not expected until the second quarter of 2025.
The BOT raised its key rate by 200 basis points to 2.50 per cent over eight meetings between August 2022 and September 2023, and has held it steady since then.
Some central banks have started easing policy, including in the Philippines and New Zealand last week. The next BOT policy review is on Oct 16.
The BOT has previously said annual headline inflation, which was 0.83 per cent in July, would return to its target range of 1 per cent to 3 per cent in the fourth quarter of the year.
South-east Asia’s second-largest economy grew 2.3 per cent in the April-June quarter from a year earlier, accelerating from the 1.6 per cent growth in the prior quarter, but analysts said fiscal policy uncertainty clouded the outlook. REUTERS
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