Thai central bank says interest rate hold was robust policy amid uncertainty

THAILAND’S central bank said on Monday (Jan 6) that a decision to hold the key interest rate steady last month was a robust policy as the economy is facing heightened uncertainty.

Monetary policy becomes less effective under high uncertainty, but holding the rate steady does not rule out future policy adjustments, the central bank said in a paper prepared for a monetary policy forum.

Last month, the Bank of Thailand left its key interest rate unchanged at 2.25 per cent, after a surprise cut in the previous review in October.

At the review, it maintained its forecast for economic growth at 2.7 per cent in 2024 and 2.9 per cent in 2025. The next rate review is on Feb 26.

Growth was seen more than 3 per cent in the last quarter last year, the central bank said in the paper.

The economy was likely to grow closer to potential, driven by exports, tourism and domestic demand, the central bank said, adding that potential protectionism from the United States under incoming president, Donald Trump, could drive more Chinese goods to Thailand. REUTERS