The Bank of Thailand on Wednesday held the policy rate near a record low, seeking to preserve policy room despite signs that the economy is heading deeper into deflation again.
The one-day bond repurchase rate was left at 1.5%, with Monetary Policy Committee members voting unanimously in favour, the BoT said on Wednesday. All 21 economists surveyed by Bloomberg predicted the decision.
Policy makers are struggling to get inflation back into the 1% to 4% target range. After about a year of low but positive inflation, consumer prices declined for a second month in June, prompting the government to lower its outlook for this year. Even so, the central bank has been reluctant to cut interest rates despite a stronger currency and amid worries over consumer debt levels.
The central bank raised its economic growth forecast for this year to 3.5% from 3.4%, and upgraded its estimate for exports.
The central bank now expects exports to rise 5% this year, rather than the 2.2% projected three months ago.
Thai exports, a traditional growth driver, were flat in 2016 and contracted the three previous years, according to central bank data.
The BoT now predicts headline inflation at 0.8% this year, compared with 1.2% seen earlier.
The National Economic and Social Development Board in May forecast 2017 economic growth of 3.3%-3.8%, with exports rising 3.6%.
Last year, Thailand's economy grew 3.2%, less than achieved by regional peers.