Thailand keeps benchmark interest rate at 1.5 pct

AP News
Posted: Aug 03, 2016 6:33 AM
Thailand keeps benchmark interest rate at 1.5 pct

BANGKOK (AP) — Thailand's central bank decided Wednesday to keep its benchmark interest rate unchanged at 1.5 percent.

The Bank of Thailand said the economy was recovering but faces rising risks from global uncertainties, including Britain's recent vote to leave the European Union and China's slowing growth.

The central bank said in a statement that holding the rate at its current level would allow "policy space" if conditions worsen.

Thailand's economy grew at a faster than expected 2.8 percent pace in 2015 and kept up steady momentum in the first quarter of the year. The World Bank is forecasting 2.5 percent growth this year, supported by government spending and tourism.

Inflation remains weak, at 0.1 percent, and the central bank may cut rates later in the year if growth stalls, Krystal Tan of Capital Economics said in a commentary.

The country is holding a referendum Sunday on a new constitution proposed by the military government, which took power in a 2014 coup. Whichever way the vote goes, it's unclear if it might tamp down political tensions or just aggravate them, Tan said.