Thailand’s central bank left its key interest rate unchanged at a record low on Wednesday as the [economy][1] need support from the continued low policy rate.
The Monetary Policy Committee of Bank of Thailand unanimously voted to retain the interest rate at 0.50 percent. The bank had reduced the rate by 25 basis points in May.
The bank said, “The Committee would monitor the adequacy of the government measures and various risks, especially the new wave of the domestic outbreak in deliberating monetary policy going forward.”
The bank reiterated that it would stand ready to use additional appropriate monetary policy tools if necessary.
The MPC forecast the economy to shrink 6.6 percent in 2020, which was better than previously assessed due to improvement in private consumption and merchandise exports.
The economy is forecast to expand 3.2 percent and 4.8 percent in 2021 and 2022, respectively. The projection for 2021 was revised down from 3.6 percent.
Nonetheless, the economic recovery remained highly uncertain which would in the short term depend on the situation of the new wave of Covid-19 outbreak and corresponding containment measures, the bank noted.
The poor outlook for the economy means interest rates are likely to remain low for some time to come, Gareth Leather, an economist at Capital Economics, said.
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