Bank of Thailand keeps interest rates at record low
Updated
The Bank of Thailand (BOT) has kept interest rates at a record low of 0.5% as the Southeast Asian state struggles with an upswing in coronavirus cases that are slowing plans to reopen its tourism-dependent economy.
The central bank’s announcement that its monetary policy committee had voted to keep rates static had been widely expected as was its lower economic growth forecast for 2021.
The BOT monetary policy committee voted unanimously to hold the benchmark one-day repurchase rate at 0.50% for a ninth straight meeting. The central bank also scaled-back its growth forecast for 2021 to 1.8% from 3%.
Super-spreader
Thailand received plaudits globally for its handling of the early stages of COVID-19 but the impact of the delta variant and super-spreader events linked to nightclubs has seen the number of cases rise.
Thailand’s economy is heavily dependent on tourism, with holiday favourite Phuket estimated to earn 95% of its income from visitors.
Jeremy Zook, a director in Fitch’s Asia-Pacific Sovereigns team, said in a webinar today that the Thai economy should rebound by 4.2% in 2022.
Phuket reopens
Thailand is planning to reboot its tourism sector by reopening Phuket to vaccinated international visitors in July, however, restrictions such as the closure of bars and restaurants are expected to dampen numbers.