Thailand Central Bank Maintains Policy Rate Steady

Foreks - The Bank of Thailand (BoT) did not surprise the markets in its last meeting of the year by keeping the policy interest rate steady, following a surprising rate cut in the previous meeting, due to persistent low inflation and the economy showing no signs of recovery yet.

According to the BoT statement, the one-day repo rate has remained at 2.25%. Analysts also expected the rate to remain unchanged.

This decision comes ahead of a Federal Reserve meeting, which economists say could lead Asian central banks to adopt a more cautious approach.

In its previous meeting, the Bank of Thailand made its first rate cut in four years, but indicated ongoing risks to financial stability, including slow domestic credit growth and external shocks.

Data showing signs of improvement in an economy struggling to gain momentum post-pandemic has somewhat alleviated the immediate pressure on the BoT to cut rates again.

In the third quarter, the Thai economy recorded its fastest growth in two years, but inflation continues to remain below the target, and other indicators point to weak demand among consumers and businesses.

Consumer prices in Thailand were reported at an annual rate of 0.95% for November. The November consumer price index reading marked the sixth consecutive month of inflation remaining below the target.