By Kitiphong Thaichareon and Orathai Sriring
BANGKOK, Oct 28 (Reuters) – Thailand’s central bank kept its key interest rate unchanged for a fourth straight meeting on Wednesday, as widely expected.
The Bank of Thailand’s monetary policy committee voted unanimously to maintain the one-day repurchase rate at 1.00%. All 26 economists polled by Reuters had expected the policy rate to remain unchanged.
“The monetary committee sees that low rates will have a long-term effect. If the economy is strong enough, rates can gradually rise to maintain policy space,” Assistant Governor Don Nakornthab told a briefing
Its next rate meeting is on December 23. The baht was largely unchanged after the decision.
The central bank forecast the economy would grow 2.4% this year and 2.1% in 2027, compared with its June forecasts of 2.3% and 1.8%, respectively, supported by stronger momentum in exports, plus technology and AI-related private investment.
“Nevertheless, overall growth remains below potential and the benefits remain concentrated,” it said.
Southeast Asia’s second-largest economy expanded 1.9% annually in the second quarter, down sharply from 2.8% in the previous quarter. Last year’s growth was 2.4% and lagged regional peers.
RATE EXPECTED TO HOLD UNTIL END-2027
While many central banks including the Philippines have raised interest rates in response to inflationary pressures linked to the war in the Middle East, Thailand has kept its policy rate unchanged since the conflict started.
Most economists polled by Reuters expect the rate to remain that way through to the end of 2027.
The central bank had cut the policy rate six times, by a total of 150 basis points, between October 2024 and February 2026 to support an economy constrained by sluggish domestic demand and high household debt.
In an interview earlier this month, Deputy Governor Piti Disyatat said monetary policy would remain accommodative for now and the policy rate would normalise only when the economy was ready.
The central bank now forecasts headline inflation at 2.1% this year, compared with 2.2% projected earlier this month. For 2027, it expects headline inflation at 1.3% versus 1.4% seen in June.
Exports, a key source of Thailand’s growth, will rise 22% this year, the BOT said, compared with a rise of 17% to 18% projected earlier this month and 14% seen in June.
It forecast export growth of 15% in 2027 versus a rise of 4.6% seen in June.
Foreign tourist arrivals, another key driver, are seen at 32 million this year and 34.5 million in 2027, the BOT said, both down by one million from previous forecasts.
(Reporting by Orathai Sriring, Kitiphong Thaichareon, Chayut Setboonsarng; Editing by Martin Petty)
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