Thai monetary policy 'very, very accommodative', no change to growth outlook, central bank official says

Bangkok, September 17 - Thailand's central bank is implementing a highly accommodative monetary policy to support a sluggish economy, according to an assistant governor who spoke to Reuters. Don Nakornthab, the assistant governor for monetary policy, stated that the current interest rate of 1.00% is among the lowest in the world and necessary to revitalize the economy.

The central bank maintained its key interest rate at 1.00% for the third consecutive month, citing weak and uneven growth. The next policy review is scheduled for October 28. In an interview, Nakornthab emphasized that the current policy stance is necessary due to the country's weak economy, though he acknowledged that options for further adjustments remain open.

He noted that the central bank cut its policy rate six times by 150 basis points between October 2024 and February 2026 to stimulate an economy suffering from weak domestic demand and high household debt levels. Thailand's GDP growth is projected at 2.3% for the year and 1.8% for the following year, with headline inflation expected to be around 2% this year.

The central bank expects exports to grow more than the initially forecasted 14% this year, while the weakening Thai baht against the US dollar, currently down by 5.7% for the year, is beneficial for exports and the economy, provided the trend remains stable and orderly.