Thai monetary policy 'very, very accommodative', no change to growth outlook, central bank official says

BANGKOK, Sept 17 : The Thai central bank's monetary policy is "very, very accommodative" right now to support a weak economy, with growth expected to exceed 3 per cent in the current quarter and hit around 2 per cent in the last quarter of 2026, an assistant governor said on Thursday.

In an interview with Reuters, Don Nakornthab, Bank of Thailand assistant governor for monetary policy, said the current interest rate of 1.00 per cent was among the world's lowest and was needed to get the economy back on track.  

The central bank left its key interest rate unchanged at 1.00 per cent for a third straight time last month, saying economic growth was low and uneven. Its next policy review is October 28.

"I would say it's very, very accommodative, but I think this is needed because the economy has been quite weak and we need a competitive stance to support the recovery," he said.

Asked about the likelihood of an extended pause in rate adjustments, he said the private sector expected that, but all options remain open.   

"Right now this is quite appropriate at the moment, but it doesn't mean that we cannot go lower or we cannot move higher. Anything can happen," he said. 

The central bank cut its policy rate six times by a total of 150 basis points between October 2024 and February 2026 to stimulate an economy weighed down by weak domestic demand and household debt levels that are among the highest in Asia. 

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 growth in the previous quarter.

Don said the central bank was sticking to its June projection for GDP growth of 2.3 per cent this year and 1.8 per cent next year. It is due to provide updated forecasts at the next rate meeting.

Headline inflation could be at around 2 per cent this year, he said, down from its forecast in June of 2.8 per cent. Exports for this year could be higher than the 14 per cent growth seen back in June, he said. 

The baht's weakness was good for exports and the economy and its movement was quite orderly, but needs to stay that way.  

The baht  has weakened by 5.7 per cent against the U.S. dollar so far this year.

"Right now, a weak baht is good for the Thai economy, as long as it's not too volatile or it does not slide significantly, then I think we are quite happy with what we see in the baht," he said.