Bank of Thailand Keeps Rates Unchanged -Thai Benchmark Rate Held at 2%

BANGKOK—Thailand's central bank kept its benchmark interest rate unchanged at its latest monetary policy meeting Wednesday, citing the need to support the nation's economic recovery.

The Bank of Thailand voted unanimously to maintain its policy rate at 2%. It last cut the rate in March, by 0.25 percentage point.

The decision was widely expected by economists polled by The Wall Street Journal, who said they expected Thailand's monetary policy to remain relatively accommodative until year's end.

"Overall economic conditions have shown improvement, mainly due to signs of a pickup in domestic demand. Private confidence has rebounded following the military government's measures," said Kobsidthi Silpachai, head of research at KasikornbankKBANK.TH +2.19% in Bangkok. "Even with unimpressive export performance so far, improved domestic demand and government spending are expected to shore up economic growth in 2H 2014."

Thailand's exports fell 0.5% on year in July, while private consumption rose 0.2%, the bank's data showed.

Economists are also expecting expansionary fiscal policy now that the military-controlled government has formally taken office following a May 22 coup.

"As fiscal policy will now take care of near-term economic growth, monetary policy will take care of price stability," said Tim Leelahaphan, an economist at Maybank Kim Eng.

Since taking over nearly four months ago, the military junta has unlocked fiscal spending and approved billions of dollars of infrastructure development.