The Bank of Thailand (BoT) on Wednesday kept its benchmark interest rate unchanged at 1.25 percent, the lowest level since July 2004.
The central bank's decision was in line with the expectation of most economists.
The BoT refrained from following Malaysia in raising borrowing costs as anti-government protests scheduled for this weekend could affect the Thai economic recovery.
The Cabinet's resolution yesterday to impose the Internal Security Act (ISA) for Bangkok and surrounding areas ahead of the anti-government red-shirts rallies planned for this weekend could have short-term impacts on investors' confidence and domestic spending, the Bank of Thailand (BoT) said.
The money market is sensitive to positive and negative news, or rumours in the short-run, but for the long term the market and investors' confidence depends on the combination of the Thai political and economic outlook.
