BANGKOK, Feb. 25 (Xinhua) -- Thailand's central bank slashed its key interest rate on Wednesday as policymakers seek to support the economic recovery, ease debt burdens for small businesses and households, and anchor medium-term inflation expectations.
The Bank of Thailand's monetary policy committee voted 4-2 to lower the one-day repurchase rate by 25 basis points to 1 percent during its first meeting of the year, bringing the borrowing cost to the lowest level since September 2022.
The Wednesday review marked the sixth reduction since October 2024, with rates down by a total of 150 basis points.
Despite the Thai economy in the final quarter of last year expanding stronger than previously estimated, the growth is expected to remain below potential in 2026 and 2027 and uneven across sectors, reflecting structural constraints and intensified competition, the central bank said in a statement.
Downside risks to inflation are projected to increase compared to earlier assessments, mainly due to declining energy prices, potential additional government measures and weak purchasing power, the central bank noted.
It added that headline inflation is now projected to gradually return to the target range later than previously assessed, shifting from the first half of 2027 to the second half.
Don Nakornthab, secretary of the policy committee, said the current benchmark rate maintains a sufficiently accommodative monetary policy stance. This aligns with the economic outlook and facilitates the gradual return of inflation to the medium-term target range.
However, subdued economic growth stemming from structural factors cannot be addressed by monetary policy alone, Don told a news conference.
He added that policies on multiple fronts must be integrated to enhance productivity and strengthen the competitiveness of the business sector, along with other targeted financial measures. ■