08.08.201806:51:00UTC+00Thailand Central Bank Maintains Benchmark Rates

Thailand's central bank maintained its interest rate unchanged on Wednesday, as widely expected, as policymakers assessed the current stance conducive for sustained growth.

The Monetary Policy Committee of Bank of Thailand voted 6-1 to hold the policy rate at 1.50 percent. One member sought a quarter point rate hike.

The Committee viewed that the current accommodative monetary policy stance remained conducive to the continuation of economic growth and was appropriate given the inflation target.

Meanwhile, dissenting member said economic expansion was sufficiently robust and that prolonged monetary accommodation might induce households and businesses to underestimate potential changes in financial conditions.

The Thai economy as a whole was projected to continue to gain further traction driven by both external and domestic factors.

Outlook for inflation was largely unchanged from the previous assessment with the annual average expected to be within target.

Looking ahead, the central bank said the baht would likely remain volatile and it would continue to closely monitor exchange rate developments as well as impacts on the economy.

Given the decent outlook for the economy, Krystal Tan, an economist at Capital Economics said a rate hike is now more likely than not this year. The economist expects an increase in rate by 25 basis points to 1.75 percent this year, probably in the fourth quarter.