Thailand's central bank left its key interest rate unchanged for a third straight meeting on Wednesday, as widely expected, resisting government pressure to lower borrowing costs to help revive Southeast Asia's second-largest economy.
The Bank of Thailand's (BoT) Monetary Policy Committee held the one-day repurchase rate at 2.50%, the highest in more than a decade. It had raised the rate by 200 basis points since August 2022 to curb inflation.
Of 26 economists in a Reuters poll, 16 had predicted the BoT would hold the rate steady on Wednesday, while the other 10 had forecast a quarter-point cut.
The central bank on Wednesday said it expects headline inflation to be 0.6% this year versus a previous forecast in February of 1%.
Miguel Chanco at Pantheon Macroeconomics said, "our core belief is that the start of gradual easing is imminent, with GDP growth soft and weakening, and CPI still in outright deflation."
"We've been expecting the BoT to keep rates higher than necessary for a bit longer, just to demonstrate its independence as an institution amid the government's explicit pleas for cuts as soon as possible."
Prime Minister Srettha Thavisin, also the finance minister, has repeatedly stressed the need for rate cuts, citing waning demand and lackluster growth to support his case.
So far, the BoT has rejected those arguments, including Mr Srettha's call for an emergency rate cut in February, saying monetary tools cannot fix these issues.
The central bank's next rate review is June 12.
Last month, the central bank lowered its 2024 growth outlook to 2.5% to 3.0% from 3.2%.
On April 4, Thailand's Bond Market Association (ThaiBMA) said it expects the BoT to cut rates twice this year starting from June and totalling 50 basis points.