Thailand monetary policy should remain accommodative, central bank minutes show

The Bank of Thailand will keep monetary policy accommodative to support an economic recovery and remains ready to adjust policy settings as needed, the minutes of the central bank’s Oct 8 policy meeting showed on Wednesday (Oct 22).

At the meeting, the monetary policy committee unexpectedly voted 5-2 to leave the one-day repurchase rate unchanged at 1.5 per cent.

In the minutes, the committee said policy should remain accommodative and noted that the impact of earlier rate cuts was still feeding through to the economy.

“Most members placed importance on the timing and effectiveness of monetary policy given the limited policy space and therefore voted to maintain the policy rate at this meeting,” the minutes showed.

The central bank has cut its key rate four times over the past year to support South-east Asia’s second-largest economy, which is grappling with US tariffs, high household debt, and a strong baht.

The central bank expects economic growth of 2.2 per cent this year and 1.6 per cent next year. Last year’s growth of 2.5 per cent lagged peers. Governor Vitai Ratanakorn, who took office at the start of October, has said interest rates could be cut if needed to lift inflation and growth.

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The next policy review is on Dec 17, and some economists expect a further rate reduction. REUTERS