By Orathai Sriring and Thanadech Staporncharnchai

BANGKOK (Reuters) – Thailand’s monetary policy should remain accommodative as the economy faces multiple headwinds in the second half of this year, including from U.S. tariffs, the minutes of the central bank’s August 13 policy meeting showed on Wednesday.

The Bank of Thailand stated that U.S. tariffs are expected to dampen U.S. demand and global trade activity. Their impact on the economy is expected to be prolonged and could exacerbate existing structural challenges and competitiveness issues.

At its meeting two weeks ago, the monetary policy committee voted unanimously to cut the one-day repurchase rate by 25 basis points to a near three-year low of 1.50%.

“Going forward, the Committee viewed that monetary policy should remain accommodative to support the economy,” the minutes said.

“At the same time, it was important to ensure macro-financial stability, while considering the limited policy space.”

The August cut marked the fourth reduction in 10 months aimed at supporting a sluggish economy grappling with U.S. tariffs and softer tourism.

Deputy Finance Minister Paopoom Rojanasakul informed reporters that there is room for further rate cuts. He mentioned that while growth is expected to slow from the first half’s annual pace of 3%, he still anticipates it to surpass the finance ministry’s forecast of 2.2% for 2025.

Earlier this month, the United States finalized tariffs on Thai imports at 19%, consistent with regional peers and markedly below the rate initially proposed in April. However, tariff rates on transshipments via Thailand from third countries remain uncertain.

During the policy review, the central bank indicated that Southeast Asia’s second-largest economy is still expected to grow close to its forecasts of 2.3% for 2025 and 1.7% for next year. Last year’s growth of 2.5% lagged behind regional peers.

“Looking ahead, the economy was expected to moderate relative to the first half of the year, reflecting the impact of U.S. trade policies,” the minutes noted, highlighting risks from a slowdown in tourism, softening investment and consumption, and increased competition in manufacturing.

The next policy review is on October 8, and some economists anticipate a further rate cut.