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Thai central bank keeps key rate at 1.50%

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Thai central bank keeps key rate at 1.50%

The Thai central bank decided to leave its key interest rate unchanged, saying an accommodative policy stance should remain in place as it keeps inflation in check.

Six of the seven Bank of Thailand monetary policy committee members present at the Aug. 8 meeting voted to keep the rate at 1.50%; the sole dissenter voted to raise the rate by 0.25 percentage point to 1.75%.

"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," the central bank said in a statement, adding that it will continue to monitor downside inflationary risks.

The outlook for headline inflation was largely unchanged from the previous assessment with the annual average expected to be within target, the statement said. The central bank is targeting annual average headline inflation of 2.5%, with a tolerance band of plus or minus 1.5%, for 2018.

On currency, the central bank said the baht's volatility against the U.S. dollar is expected to continue amid tightening monetary conditions in advanced economies and trade concerns.

In June, policymakers had signaled they could consider boosting interest rates if the economy maintains its pace of growth and inflation moves closer to target.