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Bank of Thailand holds key rate as growth weakens, baht surges
[BANGKOK] The Bank of Thailand left its benchmark interest rate unchanged for a fourth straight meeting, fending off calls to ease policy in the face of a weakening economy and stronger currency.
The Monetary Policy Committee voted unanimously to hold its key rate at 1.75 per cent, the central bank said in a statement on Wednesday. All but one of the 22 economists surveyed by Bloomberg predicted the decision.
After delivering its first hike since 2011 in December, the Bank of Thailand has kept its key interest rate unchanged, concerned by still-high household debt and financial stability risks
Pressure is growing on policy makers to ease as growth weakens. Exports in the trade-reliant economy fell in May, while manufacturing and tourism also contracted. Economic growth of 2.8 per cent in the first quarter was the slowest since 2014.
The baht's appreciation is also undermining growth. It gained 2.5 per cent against the dollar in the past three months, the most among emerging markets tracked by Bloomberg
Inflation remains benign and has stayed within the central bank's 1 per cent-4 per cent target range since March. The Commerce Ministry has said price growth may accelerate in the second half.
Regional central banks from India to New Zealand have cut interest rates in recent weeks to boost their economies amid an escalating US-China trade war
Deputy Prime Minister Somkid Jatusripitak said hours before the rate decision that the Bank of Thailand will soon need to cut rates as "it can't go against the trend" if the economy continues to weaken
A new government under Prime Minister Prayuth Chan-Ocha is due to take office by July after a disputed general election in March.