Thai central bank keeps interest rate unchanged, as expected

BANGKOK, Oct 28 : 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 per cent.

All 26 economists polled by Reuters had expected the policy rate to remain unchanged, and most economists forecast the central bank would hold it there through the end of 2027.

 "The committee views that the current policy rate is appropriate to support economic recovery," the central bank said in a statement.

"While inflation has temporarily increased due to supply-side factors, the committee will continue to monitor the inflation outlook and surrounding risks, as well as the effects of low interest rates on long-term macro-financial stability," it said. 

It forecast the economy would grow 2.4 per cent this year and 2.1 per cent in 2027, compared with its June forecasts of 2.3 per cent and 1.8 per cent, respectively. 

It said that overall, growth remains below its potential. 

Southeast Asia's second-largest economy expanded 1.9 per cent annually in the second quarter of this year, down sharply from 2.8 per cent in the previous quarter. Last year's growth of 2.4 per cent lagged regional peers.

The central bank's next rate meeting is on December 23.

The baht was largely unchanged after the rate decision. 

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. 

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 the economy, which has been grappling with sluggish domestic demand and high household debt.

In an interview earlier this month, Deputy Governor Piti Disyatat said the central bank's monetary policy would remain accommodative for now and the policy rate would normalise only when the economy was ready.

Annual headline inflation quickened to 2.82 per cent in September, but inside the central bank's target range of 1 per cent to 3 per cent.

The central bank now forecasts headline inflation at 2.1 per cent this year, compared with 2.2 per cent projected earlier this month and 2.8 per cent seen in June.

For 2027, it expected headline inflation at 1.3 per cent versus 1.4 per cent projected in June.