Thai central bank says interest rate hold was robust policy amid uncertainty

BANGKOK (Reuters) – Thailand’s central bank said on Monday a decision to hold the key interest rate steady last month was a robust policy as the economy is facing heightened uncertainty.

Monetary policy becomes less effective under high uncertainty, but holding the rate steady does not rule out future policy adjustments, the central bank said in a paper prepared for a monetary policy forum.

Last month, the Bank of Thailand left its key interest rate unchanged at 2.25%, after a surprise cut in the previous review in October.

At the review, it maintained its forecast for economic growth at 2.7% in 2024 and 2.9% in 2025. The next rate review is on Feb. 26.

Growth was seen more than 3% in the last quarter last year, the central bank said in the paper.

The economy was likely to grow closer to potential, driven by exports, tourism and domestic demand, the central bank said, adding that potential protectionism from the United States under incoming president, Donald Trump, could drive more Chinese goods to Thailand.