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Thailand's central bank keeps policy rate unchanged

The Bank of Thailand decided to keep the policy rate at 1.50% as monetary conditions remained accommodative and conducive to the country's economic recovery.

While the Thai economy would continue to expand at a pace close to the previous assessment, it will face greater uncertainties going forward, particularly the fragile global economic recovery and uncertainties in the economic and monetary policy directions of major advanced economies, the central bank noted. The central bank also said the public's medium-term inflation expectations remained close to the target and that core inflation remained stable at low levels.

The central bank added that financial stability remained sound and should provide a cushion against potential volatilities on both domestic and external fronts. However, pockets of risks remain, such as the deterioration in loan quality of some business sectors and the search-for-yield behavior under the prolonged low-interest rate environment.