Thailand holds key rate to shield growth

Keeping it steady: Thailand’s central bank logo is seen at the Bank of Thailand in Bangkok. The central bank left the one-day bond repurchase rate at 1.5, with monetary policy committee members unanimously in favour. — Reuters

BANGKOK: Thailand’s central bank held its key interest rate near a record low to shield the nation’s economic recovery as the threat of trade protectionism mounts.

The one-day bond repurchase rate was left at 1.5%, with monetary policy committee members unanimously in favor, the Bank of Thailand said in Bangkok.

All 22 economists surveyed by Bloomberg predicted the decision.

Thailand’s economic growth is lagging peers in South-East Asia, with the International Monetary Fund forecasting expansion of 3.3% this year.

Rising protectionism in the US is clouding the outlook for the nation’s exports, which account for more than half of the economy and barely grew last year, while private investment remains weak.

The Bank of Thailand is “likely to maintain its accommodative policy stance for as long as the growth recovery remains tentative,” Gundy Cahyadi, an economist at DBS Group Holdings Ltd in Singapore, said before the decision.

“Exports have contributed very little to growth. Domestic demand, particularly investment is still going to be slow.”

Consumer prices rose 1.55% in January from a year earlier, the fastest pace in 28 months. The central bank aims to keep inflation in a range of 1% to 4% this year. — Bloomberg