The Thai financial system has become more vulnerable due to negative shocks from the latest coronavirus outbreak and there remained significant risks to the economy, the minutes of the central bank's last meeting showed on Wednesday.
On May 5, the Bank of Thailand's monetary policy committee left the policy rate unchanged at a record low of 0.50% for an eighth straight meeting to help support Southeast Asia's second-largest economy amid a third wave of Covid-19 infections.
The rate hold was to preserve limited policy room to be used at the most effective time, the minutes said.
The Thai economy would expand at a much lower rate due to more severe impact of the latest outbreak relative to the second wave, the minutes said.
The central bank's current 2021 economic growth forecast is 3.0% and it will review that at its next meeting on June 23.
"The third wave of outbreak resulted in slower and more uneven economic recovery across sectors," the minutes said. "The financial positions of Thai households had become more fragile as reflected in the elevated debt-to-income ratio, which was relatively high compared with other countries," the minutes said.
The committee would continue to monitor developments in foreign exchange markets and capital flows, the minutes said.
An acceleration of vaccine procurement and distribution would be key to Thailand's economic recovery, and the government should implement targeted and timely measures to accelerate the recovery, the minutes said.
On Tuesday, the cabinet approved a further borrowing of 700 billion baht (US$22.3 billion) to ease the outbreak impact as its current 1 trillion baht borrowing is almost used up.
The latest domestic Covid-19 outbreak, the biggest so far, has seen infections more than triple and deaths increase six fold since it started in April, following a year of success in containing earlier outbreaks.