The Bank of Thailand maintains its rate despite the slowdown in economic growth.

The Bank of Thailand has kept its interest rate policy unchanged despite slow economic recovery and weak inflation. The Bank of Thailand stated on Wednesday that its policy committee voted five to two to maintain the one-day repurchase rate at 2.50%. Six out of ten economists surveyed by The Wall Street Journal predicted that the central bank would keep its interest rate policy unchanged, while four expected a quarter-point cut.

Some economists believe that despite weak inflation, the central bank is cautious in taking measures to ease, amid ongoing economic recovery. The relatively low level of nominal interest rates and the recent weakening of the Thai baht may make officials at the BOT more inclined to maintain rates, especially in light of the U.S. Federal Reserve.

Inflation in Thailand has been weak in recent months. The consumer price index fell by 0.5% in March compared to the same period last year, while the central bank's inflation target is set at 1.0%-3.0%. The country's GDP increased by 1.7% in the fourth quarter compared to the same period last year, supported by growth in private consumption.

The Thai baht has depreciated in recent months, partly due to a slow economic recovery that lags behind other countries in the region. The currency recently traded at 36.33 baht per dollar after hitting a six-month low of 36.85 baht per dollar last week.

The central bank last raised its key interest rate in September, after the country's parliament elected billionaire Srettha Thavisin as the new prime minister in August, who promised to stimulate the economy through incentive measures, following nearly a decade of military-backed rule. The Thai central bank increased its key rate by 2 percentage points to a decade-high in just over a year in response to a surge in inflation caused by the war in Russia and Ukraine and the recovery from the pandemic.