Thailand leaves interest rate unchanged

BANGKOK, Jan 22 (AFP): Thailand's central bank on Wednesday left its key interest rate unchanged at 2.25 per cent in the face of growing worries about the economic impact of anti-government protests in the capital.

Economic growth has been weaker than expected because of soft domestic demand, according to the Bank of Thailand, which last reduced its benchmark lending rate by 25 basis points in November.

"The ongoing political situation continued to dent private confidence, weighing on (the) overall outlook for growth," it said in a statement after its Monetary Policy Committee voted 4-3 to maintain the policy rate unchanged.

"Exports expanded at a subdued pace, despite signs of recovery in some sectors."

Prime Minister Yingluck Shinawatra is under intense pressure to step down after more than two months of street rallies aimed at ousting her elected government and installing an unelected "people's council".

The demonstrators have staged a self-styled "shutdown" of Bangkok since January 13, erecting roadblocks and rally stages at several main intersections including in the main hotel and shopping districts.

"The ongoing political situation poses risks to growth, but sound economic fundamentals should help the economy weather these short-term risks," the central bank said.

At the same time it hinted that another rate cut could be possible in the future, saying it was "ready to take appropriate actions as warranted".