Thai central bank holds key rate at record low as outbreak eases

[BANGKOK] Thailand's central bank held its key interest rate unchanged as the country's Covid-19 outbreak eases, allowing the government to loosen movement restrictions to boost local demand and tourism.

The Bank of Thailand's rate setting committee voted unanimously on Wednesday to hold the one-day repurchase rate at a record-low 0.5 per cent for an 11th straight meeting, as 19 of 22 economists in a Bloomberg survey predicted. The other three expected a 25-basis point cut.

Thailand is joining other Southeast Asian countries in slowly easing pandemic restrictions as it balances virus-containment measures with steps to revive the economy. The government has promoted a "living with Covid-19" strategy and ramped up its vaccination campaign, followed by a decision Monday to cut the quarantine period, shorten the nightly curfew and allow more businesses to reopen.

Thailand reported 9,489 new Covid-19 cases Tuesday, its lowest tally since July 15. About 33 per cent of the population has been vaccinated, up from 18 per cent a month ago.

Earlier this month, the central bank relaxed rules for its low-interest loan programme and boosted incentives for banks to encourage debt restructuring. The government raised the public debt-to-GDP ratio to 70 per cent from 60 per cent from Sept 20 to allow for higher state borrowing to fight the outbreak.

The Cabinet also approved a public debt management plan for the fiscal year starting Oct 1, which includes US$39.7 billion in new borrowing mainly to finance the budget deficit, government investments and virus-related projects.

BLOOMBERG