(Bloomberg) -- Thailand’s central bank kept its benchmark interest rate unchanged for the first time in 17 months, as policymakers look to support the economy’s recovery amid subdued inflation.

The Monetary Policy Committee voted unanimously to maintain the one-day repurchase rate steady at 2.50% on Wednesday, as expected by all 22 economists in a Bloomberg survey. The Bank of Thailand said the rate — the highest in a decade — was appropriate “for supporting long-term sustainable growth” and keep inflation in check.

“The committee will take into account growth and inflation outlook as well as associated risks in deliberating monetary policy looking ahead,” the BOT said in a statement.

The rate will probably remain at the current level for a while, Assistant Governor Piti Disyatat said at a briefing that followed the decision.

The pause was accompanied by the central bank cutting its growth forecast for this year to 2.4% from a previous estimate of 2.8%. It also reduced its projection for 2024 to 3.2% from 4.4%, with a slight upside seen on account of the government’s digital-wallet stimulus program.

Despite the bleaker outlook, the central bank said “the broad trajectory of the economy is one of a continued recovery.” That will be “driven by a robust expansion in private consumption on the back of services spending as well as an improvement in employment and labor income.”

Headline inflation is projected to stay within the central bank’s 1%-3% target range, at 1.3% and 2% in 2023 and 2024, respectively.

While many central banks in Southeast Asia have shifted to a rate pause, BOT Governor Sethaput Suthiwartnarueput on Tuesday said policymakers may have to contend with greater exchange rate volatility amid higher interest rates in advanced economies. 

The baht, known for being more volatile than its Southeast Asian neighbors, has seen the swings increase to a range of 8%-9% from about 3%-4% before the pandemic, the governor said.

The local currency held on to gains after the decision, trading about 0.6% stronger against the US dollar on Wednesday. 

While exports and tourism have been recovering more slowly than expected on account of subdued growth in China, the BOT sees tourist arrivals returning to pre-pandemic levels by late 2025, driven mainly by non-Chinese visitors.

For this year, the central bank sees tourist arrivals at 28.3 million and 34.5 million in 2024.  

--With assistance from Tomoko Sato, Pathom Sangwongwanich, Patpicha Tanakasempipat and Cecilia Yap.

(Updates with details throughout.)

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