BANGKOK, 12th June, 2024 (WAM) -- Thailand’s central bank left its key interest rate unchanged for the fourth straight meeting as an improving economy and a pick-up in inflation gave it more leg room to resist the government’s calls to ease policy, Bloomberg reported on Wednesday.
The Monetary Policy Committee voted 6-1 to maintain the one-day repurchase rate steady at a decade-high 2.50 percent at Wednesday’s meeting, as predicted by 21 of the 24 economists surveyed by Bloomberg. “The current policy interest rate is consistent with the economy converging to its potential, as well as conducive to safeguarding macro-financial stability,” it said in a statement.
The baht (Thai currency) was up 0.2 percent to 36.69 per US dollar after the decision. The benchmark SET index of stocks was little changed, trading near a four-year low.
The hold decision comes even after the government revived calls on the Bank of Thailand to deliver a quarter-point cut, saying the policy rate is “too high” and not fully aligned with the nation’s strategy to spend and boost growth. Prime Minister Srettha Thavisin and his officials have repeatedly hankered for lower borrowing costs to support Southeast Asia’s second-largest economy, which has expanded at a rate of less than 2 percent over the past decade.
However, the voting on Wednesday tilted further towards a pause after just one committee member voted to lower the key rate citing structural challenges to Thailand’s recovery and the debt-servicing burden on borrowers. In the past two meetings, the split was 5-2.