Thailand's central bank has kept its benchmark interest rate unchanged for a third consecutive meeting, aiming to bolster economic recovery while navigating the fallout from higher energy costs triggered by Middle East tensions. The Monetary Policy Committee voted unanimously on Wednesday to hold the one-day repurchase rate at 1%, the lowest level seen since September 2022. This decision aligned with the expectations of all 23 economists surveyed by Bloomberg, who had predicted no change.

The central bank noted that government stimulus measures and a gradual easing of geopolitical tensions are likely to support a rebound from the sluggish performance recorded in the second quarter. Despite these positive signals, the Thai economy remains constrained by several factors, including heavy reliance on imported energy and long-standing structural challenges such as high household debt, low productivity, and an aging population.

Thailand's economy expanded by 1.9% in the second quarter, marking the slowest growth among the six major ASEAN economies. This figure trails the 2.3% growth seen in the Philippines and is less than a quarter of Vietnam's robust 8.4% expansion. The central bank acknowledged recent currency fluctuations but stopped short of signaling any policy shift, stating that the baht has experienced notable volatility against the U.S. dollar due to developments in Middle East geopolitics and shifting market expectations regarding the Federal Reserve's monetary policy trajectory.