Thailand kept its interest rate unchanged for a fifth straight meeting to spur economic growth after the government pledged to accelerate spending.
The Bank of Thailand held its one-day bond repurchase rate at 2 percent, with monetary policy committee members voting 6 to 1 in favor, it said in Bangkok today. All 24 economists in a Bloomberg News survey predicted the decision, which extends a pause since March, the longest such streak since 2012.
Prime Minister Prayuth Chan-Ocha, who seized power in a May 22 military coup, last month approved a stimulus package of about $11 billion that would give cash handouts to farmers and accelerate budget spending to revive an economy that is forecast to grow this year at the slowest pace since 2011. Finance Minister Sommai Phasee has said there are signs of stagnation and that the government may consider fresh stimulus.
“The economy hasn’t yet fully recovered and inflation doesn’t pose a threat either, giving the central bank more time to keep the rate unchanged and support growth,” said Thanomsri Fongarunrung, an economist at Phatra Securities Pcl in Bangkok. “The current rate is already low. Cutting it further will pose financial risks and it won’t help boost the economy much.”
The baht slipped 0.3 percent to 32.755 against the U.S. dollar as of 3:01 p.m. local time. The benchmark SET Index lost 0.2 percent.
Governor Prasarn Trairatvorakul has said that keeping the policy rate low for a long period of time may cause risks to financial stability. Consumer prices rose 1.48 percent in October from a year earlier, the slowest pace this year.