The central bank left its benchmark interest rate unchanged near a record low to support economic growth amid moderating domestic demand.
Monetary policy committee members voted unanimously to hold the one-day bond repurchase rate at 1.5%, where it’s been since 2015, according to a Bank of Thailand statement on its website on Wednesday. All 23 economists surveyed by Bloomberg predicted the decision. One committee member was unable to attend the meeting, the central bank said.
The policy rate, a quarter-point above the record low, has been unchanged since a cut in April 2015.
Thailand's accommodative monetary policy stance remains "conducive to the continuation of economic growth and should support the rise of headline inflation toward target in a sustainable manner, although the process would take some time," the MPC said.
Annual headline inflation in April was the highest in 40 months, but just 1.07%, moving into the central bank's 1-4% target range for the first time since February 2017.
The BOT is in "little hurry" to raise rates mainly because inflation is very low, said Krystal Tan of Capital Economics, which expects the benchmark to be held for the rest of 2018.
BOT Assistant Governor Jaturong Jantarangs said that compared with when the central bank issued 2018 forecasts in March, the economy has been gaining further traction.
Lift from exports
In March, the BOT raised its 2018 growth forecast to 4.1% from 3.9% and saw exports - a growth driver - up 7% rather than the 4% projected earlier.
The economy grew 3.9% in 2017, the fastest pace in five years, but lagged the Philippines' 6.7%, Malaysia's 5.9% and Indonesia's 5.07%.
Strong exports and tourism have lifted growth for Southeast Asia's second-largest economy. But domestic demand recovery is still at a nascent stage, crimped by high household debt and contracting farm incomes.
Foreign investors have been net sellers of about 100 billion baht ($3.12 billion) of Thai stocks and bonds so far this year
Capital outflows are not yet pressuring Thailand's monetary policy, although the baht is likely to remain volatile, Jaturong said.
"Monetary policy tightening in other countries is no pressure on us, as we have strong external positions," he said.
Four years after the military seized power, the economy remains dependent on exports and tourism and companies are reluctant to invest at home. Strong foreign-reserve buffers and a current-account surplus are helping to shield the nation from emerging-market volatility, giving the central bank scope to skirt a wave of policy tightening as the US raises rates.
As central banks in Malaysia and Philippines kick off monetary policy tightening in Southeast Asia, speculation is building on who will follow next. Sixteen of the 29 economists surveyed by Bloomberg predict Indonesia’s central bank will raise its benchmark rate on Thursday.