Bank of Thailand to Maintain Policy Rate at 1.5%

In deliberating their policy decision, the Committee assessed that the Thai economy continued to gain further traction over the previous assessment, driven by both growth in the external sector and gradual improvements in domestic demand. Headline inflation gradually rose in line with the previous assessment. Core inflation was projected to rise slowly. Overall financial conditions remained accommodative and conducive to economic growth. Financial stability remained sound overall, but it was deemed necessary to monitor pockets of risks that might lead to the build-up of vulnerabilities in the financial system in the future especially given prolonged monetary accommodation. The Committee viewed that the current accommodative monetary policy stance remained conducive to the continuation of economic growth and should support the rise of headline inflation toward target in a sustainable manner, although the process would take some time. Thus, the Committee decided to keep the policy rate unchanged at this meeting.

Looking ahead, the Thai economy as a whole was projected to continue to gain further traction particularly on the back of external demand. However, the strength of the domestic demand and inflation developments in the period ahead must be monitored. Hence, the Committee viewed that monetary policy should remain accommodative and would stand ready to utilize available policy tools to sustain economic growth while also ensuring financial stability.