Thailand Central Bank Holds Key Interest Rate

(RTTNews) - The Bank of Thailand maintained its interest rate on Wednesday as policymakers sees rising risks from US trade policies, geopolitical factors and domestic political conditions. The Monetary Policy Committee voted 6 to 1 to maintain the policy rate at 1.75 percent. One member sought a 25 basis-point cut to 1.50 percent.

Previously, the bank had lowered the policy rate by 25 basis points each in April and February.

The committee observed that the previous reductions have already provided some cushion against the prevailing risks. Most members focused on the timing and effectiveness of monetary policy amid high uncertainties and limited policy space.

Meanwhile, the sole dissenter observed that a reduction in policy rate is needed to alleviate interest rate burdens and support the adjustment of those affected by the weakening economic outlook.

The bank expects the economy to grow 2.3 percent this year and 1.7 percent in 2026. This year's estimated growth of 2.3 percent partly reflects stronger-than-expected outturn in the first quarter.

In the first half of 2025, manufacturing output and front-loading of exports by US manufacturers supported domestic economic growth.

However, the growth will slow down going forward due to rising risks to merchandise exports stemming from U.S. trade policies as well as geopolitics and domestic factors.

Headline inflation is forecast to remain subdued at 0.5 percent this year and 0.8 percent in 2026, due to the energy and fresh food prices, the bank said.