BANGKOK, Oct. 8 (Xinhua) -- Thailand's central bank held its key interest rate steady on Wednesday as policymakers seek to preserve monetary policy flexibility amid mounting concerns over U.S. trade policies and a slowing economy.
The Bank of Thailand's monetary policy committee voted 5-2 to keep the one-day repurchase rate unchanged at 1.5 percent, following four previous cuts, each by 25 basis points, over the past year.
Most committee members placed importance on the "timing and effectiveness of monetary policy given the limited policy space," while the transmission of previous rate cuts is still working its way through the economy, the central bank said in a statement.
The Thai economy is projected to grow at 2.2 percent this year and 1.6 percent in 2026, the statement said, slightly lower than previous forecasts of 2.3 percent and 1.7 percent, respectively.
Merchandise exports have begun to experience impacts of U.S. tariff measures, which could lead to an economic slowdown in the second half of 2025 and throughout 2026, said Sakkapop Panyanukul, secretary of the policy committee.
Tourism and domestic demand have also slowed, but a gradual recovery is anticipated going forward. Meanwhile, private consumption will see moderate growth, further supported by government stimulus measures, Sakkapop told a news conference.
Sakkapop said inflation is expected to be lower than the previous assessment, with the headline figure projected at 0 percent this year and 0.5 percent in 2026, before gradually returning to the central bank's target range of 1 percent to 3 percent by early 2027.
Lower inflation is primarily due to supply-side factors, such as falling raw food and global crude oil prices, he noted, adding that deflation risks remain low, with no signs of a broad-based price decline.
The committee agreed that an accommodative monetary policy is necessary to support the economy, stressing it "stands ready to adjust the monetary policy stance" in response to changes in the economic and inflation outlook. ■