Thailand’s central bank likely to keep interest rate unchanged

The Bank of Thailand in Bangkok (Photo: Reuters)

The Bank of Thailand (BoT) is expected to leave its key interest rate unchanged at a record low after easing monetary policy three times this year to help mitigate the economic damage from the COVID-19 pandemic, a Reuters poll showed.

In the poll, 17 of 20 economists predicted the BoT's Monetary Policy Committee would hold its one-day repurchase rate at 0.5 percent.

The rest forecast it would cut the rate by 25 basis points to a new record low of 0.25 percent, citing a weaker economic outlook and strength in the baht.

Most analysts think policy room is limited after five cuts totalling 125 basis points since August. Policymakers may want to monitor the effects of previous easing and fiscal and monetary steps introduced to mitigate the outbreak impact.

On June 19, the BoT also announced interest rate cuts for credit cards and personal loans to help debtors.

The central bank has hit its "limits on rate policy easing" as the lockdown has ended and the economy is back in action, ING economist Prakash Sakpal said.

Thailand has removed most restrictions to revive Southeast Asia's second-largest economy.

The central bank recently said the economy could shrink this year more than earlier expected. In March, it forecast a 5.3 percent contraction, the worst since the 1997-1998 Asian financial crisis. It will offer updated economic forecasts after the meeting./.

VNA