BANGKOK: Thailand's central bank left its key interest rate at a record low on Wednesday, seeking to maintain support for the Southeast Asian economy, but said a fragile recovery would continue this year driven by exports and a rebound in tourist numbers.
The Bank of Thailand's (BOT) monetary policy committee unanimously voted to hold the one-day repurchase rate at 0.50% for a 14th straight meeting after three rate cuts in 2020. The rate decision was expected by all 23 analysts polled by Reuters.
"The committee assessed that the Thai economy in 2021 would expand faster than previously projected, and the recovery would continue into 2022 driven by higher merchandise exports, as well as a higher number of foreign tourist arrivals," the BOT said in a statement after its first policy meeting of the year.
"However, the recovery would remain fragile and uneven across sectors, especially in tourism which was below pre-pandemic levels," it sad.
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The BOT said monetary policy would remain accommodative to aid the economy, and said downside risk to growth had been reduced.
Inflation hit a nine-month high of 3.23% in January, breaching the BOT's target of 1-3%, and the BOT said it should return to within target this year.
While the new coronavirous outbreak had slowed economic activity early in the year, an easing of restrictions and a resumption of a quarantine waiver for tourists should help the recovery.
Thai authorities have been trying to kickstart the critical foreign tourism sector, which normally accounts for about 12% of gross domestic product.
Nearly 40 million people visited Thailand in 2019 before the pandemic, but this slumped in 2020 after borders shut and as a reopening started edged up to 428,000 last year.
The BOT has forecast economic growth of 3.4% this year, with 5.6 million foreign tourists visiting the country.
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