No Rate Change from the Bank of Thailand

August 21, 2013

Monetary officials in Thailand had already sliced their policy rate four times, each by 25 basis points, from 3.5% prior to November 2011 to the current level of 2.5% since May 2013.  2.5% was retained after today’s meeting, although one of the seven policymakers preferred a 25-bp cut as a precautionary gesture to ensure continuous ample growth in 2014.  The others rejected the recommendation, calling 2.5% appropriate and needed.  A released statement

  • Observes softer Thai economic growth last quarter but not by more than officials had anticipated.
  • Calls the pace of consumer loans still high.
  • Notes that core and total inflation has slowed in line with the softening economy.

Prior to the Great Recession, Thailand had a 3.75% policy interest rate, which was reduced a subsequent trough of 1.25%.  2.5%, the present level, lies exactly in the middle of those extremes.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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