BoT cuts policy rate to 2%
The Bank of Thailand’s Monetary Policy Committee (MPC) yesterday decided to cut the policy interest rate by 75 basis points to 2.0 percent in a bid to boost Thai economy.
Dr.Duangmanee Vongpradhip, Bank of Thailand’s assistant governor for Monetary Policy Group, said the policy interest rate, which has been effective immediately, is now at the same level applied in January 2005.
The BoT assistant governor said the MPC found that Thailand’s exports continued declining while consumption and investment also slowed down while the government’s decision to inject 115-billion-baht supplementary spending budget for this fiscal year could see results after some time because the disbursements are expected in March or April.
She said there is a need for the monetary policy to help supplement the country’s financial policy, which is a key player in stimulating economy, adding that the MPC has to lower its policy interest rate after it had lowered it by 100 basis points since December 3.
The MPC, she said, is confident that the cut in policy interest rate would enable the public to spend more and commercial banks would lower interest on loans later.
A review of the country’s economy will be made again on January 23 as it has declined much sharper than earlier estimated, she said. The new revision is expected to put this year’s economic growth between 0.5-2.5 percent and inflation to contract after global oil prices had retreated sharply.
Last year, the MPC had lowered the policy rate four times, bringing down the rate from 3.50 percent at the beginning of the year to 2.75 percent at the end of the year.
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