Thai Central Bank Holds Rate At 1.0%

(RTTNews) - The Bank of Thailand decided to leave its interest rate unchanged on Wednesday as the current accommodative stance supports the economic recovery.

The Monetary Policy Committee of the Bank of Thailand unanimously voted to maintain the policy rate at 1.00 percent, as widely expected.

The bank has reduced the rate by 150 basis points since October 2024.

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

The bank upgraded its economic growth projection for this year citing robust exports, private investment associated with the technology and AI cycle, government measures as well as easing of geopolitical tensions.

The economy is projected to expand 2.3 percent this year, up from the prior forecast of 1.5 percent. However, growth is expected to decelerate to 1.8 percent in 2027. Although growth is projected to be stronger than previously estimated, it remains low and uneven, the bank said.

Headline inflation is expected to remain broadly in line with the previous assessment, averaging 2.8 percent this year and 1.4 percent in 2027.

Nonetheless, inflation is projected to exceed the target range during the remainder of the year due to pass-through of energy prices, before easing in 2027. Core inflation is projected to average 1.5 and 1.4 percent in 2026 and 2027, respectively.

The bank cautioned that cost pass-through by firms warrants close attention despite improving developments surrounding the Middle East conflict.