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Thai Central Bank Keeps Rate Unchanged

Thailand's central bank left its key interest rate unchanged at a record low for the tenth straight meeting, on Wednesday.

The Monetary Policy Committee of Bank of Thailand voted 4-2 to retain the interest rate at 0.50 percent. Two members sought a quarter-point reduction in rates.

The bank had last reduced the rate by 25 basis points in May 2020.

The committee expects headline inflation to be largely unchanged, while medium-term inflation expectations remained anchored within the target.

The Thai economy was projected to expand 0.7 and 3.7 percent in 2021 and 2022 respectively.

The outlook was lower than the previous one due to private consumption which was greatly affected this year and foreign tourist figures which were expected to be significantly lower next year, the bank said.

Policymakers observed that downside risks to the economic outlook remained significant from the possibility of the outbreak situation in Thailand and other countries becoming more severe.

Given the deteriorating outlook for the economy and with two of the six MPC members voting for a rate cut, the central bank is likely to loosen policy further this year, Gareth Leather, an economist at Capital Economics, said.

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