Citing an outlook for a tempered economic expansion in 2025, and muted inflation, the Bank of Thailand cut its key interest rate to 2.00% from 2.25% on Wednesday.

The Monetary Policy Committee of Thailand's central bank voted 6-1 to reduce the one-day repurchase rate "to address clearer downside risks" to the economy, according to a prepared statement.

The Bank of Thailand also cut the key rate by 0.25% in October last year, but then left rates unchanged at the central bank's December policy session.

The Bank of Thailand has a 1% to 3% inflation target band on the nation's consumer price index (CPI).

Thailand CPI's logged up at 1.3% on year in January, and the outlook is muted, according to officials.

Last month, the Thailand Commerce Ministry forecast the nation's CPI would rise by between 0.3% and 1.3% on year, near the low end of the Bank of Thailand's target range.

Meanwhile, economic growth projections are only moderate.

In 2024, Thailand's gross domestic product (GDP) expanded by 2.5% on year, according to Thailand's Fiscal Policy Office.

For 2025, Thailand's Finance Ministry has estimated the nation's GDP will expand by 3% on year, and perhaps more.

However, the Bank of Thailand sounded cautious on Wednesday.

"The Thai economy is expected to expand at a slower pace than previously estimated due to the industrial sector being pressured by structural problems and competition from foreign products, as well as higher risks from trade policies of major economies," said the central bank.