Bank of Thailand Holds Interest Rate as Election Risks Mount

(Bloomberg) -- The Bank of Thailand left its benchmark interest rate unchanged on Wednesday, as expected, providing policy stability to investors days before the nation’s first election since a military coup five years ago.

The Monetary Policy Committee voted unanimously to hold its policy rate at 1.75 percent, the Bank of Thailand said in a statement on Wednesday, in line with the forecasts from all 21 economists in a Bloomberg survey.

The MPC “viewed that the current accommodation monetary policy stance had contributed to the continuation of economic growth and was appropriate given the inflation target,” it said in a statement.

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What Bloomberg’s Economists Say

“We continue to expect the BOT will leave interest rates unchanged until there is further clarity on U.S. trade policy, especially its stance on auto tariffs.”
-- Tamara Henderson, economist covering Southeast Asia, Australia and New Zealand
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• The baht gained 2.6 percent against the dollar so far this year, the best performer in Asia, underpinned by the country’s large current account surplus and substantial reserve cushion. Going forward, the currency will be “volatile from both internal and external risks,” the central bank said, adding the MPC will monitor the foreign exchange situation and its impact on the economy
• Policy decisions will remain “data dependent,” the BoT said. The MPC will “continue to monitor fragilities in the financial system,” it said
• The BoT lowered its economic growth projection for this year to 3.8 percent from 4 percent, and forecasts expansion of 3.9 percent in 2020; it also lowered estimates for core inflation to 0.8 percent from 0.9 percent

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