# Central Bank Holds Firm on Interest Rates Despite Economic Strain

- Link: https://www.thailand-business-news.com/banking/128288-bot-declines-to-lower-interest-rates-amid-economic-pressure
- Published: 2024-02-28T13:11:55+07:00
- Author: Olivier Languepin

The Bank of Thailand has decided to maintain its current interest rate at 2.50% 
per annum despite calls for an emergency meeting to address the nation’s economic
challenges.

## Key Takeaways

 * The Bank of Thailand is maintaining its interest rate at 2.50% per annum despite
   calls for an emergency meeting, citing that lowering the rate would not directly
   address the underlying causes of slow GDP growth and negative inflation.
 * The decision to keep the interest rate steady comes in the face of political 
   pressure and a challenging economic situation, with the central bank emphasizing
   the importance of targeted measures over broad financial support to address issues
   such as stagnant incomes and high household debt.
 * Despite differing perspectives on monetary policy, the relationship between the
   Bank of Thailand and the government is described as professional and cordial,
   with the central bank prioritizing sustainable economic practices and efforts
   to manage the high household debt level.

The **Office of the National Economic and Social Development Council (NESDC)** has
recently announced that [Thailand’s economy expanded by **1.9%**](https://www.thailand-business-news.com/economics/127956-nesdc-projects-2-7-growth-rate-for-year-2024)
in 2023. While this growth is positive, it was slower than expected due to various
factors .

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BOT Governor Sethaput Suthiwartnarueput explained that lowering the interest rate
would not directly address the primary causes of slow GDP growth and negative headline
inflation. These causes include reduced spending by Chinese tourists, decreased 
petrochemical imports by Chinese firms, and delayed government budget disbursement.

The central bank emphasized the importance of targeted measures over broad financial
support and highlighted the need to manage [high household debt levels](https://www.thailand-business-news.com/economics/127458-increasing-households-debt-burden-threatens-thailands-economic-growth).

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