The Bank of Thailand kept the policy interest rate unchanged at 0.50 per cent as expected on Wednesday to support economic recovery amid surging uncertainties from the latest Covid-19 outbreak.


“With considerable downside risks, the economy would thus need support from the continued low policy rate,” said the secretary of the Monetary Policy Committee (MPC). The committee voted to hold the interest rate at 0.5 per cent for a sixth straight meeting since May 2020.


The latest figures on the economy showed continued expansion, albeit slightly lower that the Bank’s most recent forecasts, committee secretary Titanun Mallikamas was quoted as saying in a press release. The recent growth was, however, in line with the current projections by the Finance Ministry’s Fiscal Policy Office, he said.


The decision was made to preserve the limited policy space to act at the appropriate and most effective time. The MPC assessed that the impact of the recent Covid-19 outbreak on Thai economy would be less severe than last year due to less strict containment measures.


The committee expected the economy to expand less than the previous forecast, but they still held the same outlook as of December at 3.2 per cent growth in 2021 before rising to 4.8 per cent in 2022.


The FPO’s latest prediction saw 2.8-per-cent GDP growth in 2021.


In the longer term, the MPC said that the Thai economy would depend on the recovery in foreign tourist arrivals, efficacy and coverage of Covid-19 vaccination, sufficient fiscal support, and the labour market situation.


The recovery across economic sectors was likely to be more uneven especially for the vulnerable groups such as low-income households and small and medium-sized enterprises (SMEs), they added.

Central bank holds interest rate to assist Covid recovery - Thai Enquirer