Bank of Thailand Cuts Interest Rate a Second Time

January 25, 2012

Following up on a 25-basis point policy interest rate cut on November 30th, Thailand’s Monetary Policy Committee reduced such again as anticipated to 3.0% from 3.25% and released a statement that asserted inflationary pressure "remains contained" and identified "global headwinds" that could "pose risks to Thailand’s economic growth."  Not all of the drag on growth is imported, however.  Clean-up from last quarter’s flood of the century is taking longer than imagined originally.  Officials consider monetary conditions to be "accommodative" and have cautioned investors not to assume that the rate cuts in November and today are the start of a series of future moves.  Previously from July 2010 until August of 2011, the central bank had hiked its benchmark 1-day repo rate nine times, each by 25 basis points for a total move of 225 basis points from 1.25% to 3.50%.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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