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Thai Central Bank Leaves Rate Unchanged

Thailand's central bank left its key interest rate unchanged on Wednesday, after lowering it by a quarter at an unscheduled meeting last week.

The Monetary Policy Committee of the Bank of Thailand voted 4-2 to hold the policy rate at 0.75 percent. Two members voted to reduce the rate by 0.25 percentage points.

The bank had lowered the rate by 25 basis points at the meeting convened to assess the impact of the covid-19 outbreak on the economic outlook and domestic financial markets functioning.

Policymakers viewed that the economy would contract this year as the epidemic hit tourism and exports severely. Domestic demand was projected to shrink as business and household incomes were increasingly affected.

Fiscal measures must be a key mechanism to alleviate the impact on the economy and assist various groups affected by the covid-19 outbreak, the MPC said.

Inflation is projected to be negative this year with declining energy prices and the contracting economy.

The bank said it stands ready to use additional policy tools in an appropriate and timely manner. Such tools included the policy rate and other monetary measures.

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