Bank of Thailand

October 16, 2013

For the third meeting in a row, officials at Thailand’s central bank voted to retain a 2.5% policy interest rate.  The decision was as analysts expected and unanimous.  August’s decision had one dissenter, while the July vote had been unanimous.  The most recent rate change, a 25-basis point cut decided unanimously last May, was the fourth such reduction of the current cycle following cuts in November 2011, January 2012 and October 2012.  Previously, the rate was increased time times between July 2010 and August 2011 by a cumulative 225 bps but slashed in four steps between December 2008 and August 2009 by a total of 250 bps to a Great Recession low of 1.25%.

The Monetary Policy Committee released a statement today that admitted “the Thai economy grew more slowly than previously assessed” but defended continuing the present policy stance,

The MPC judges that the Thai economy is stabilizing and should gradually recover.  Fiscal policy, despite delayed disbursement, is still lending support to growth. Current accommodative monetary policy remains appropriate in supporting economic recovery in the periods ahead, given uncertain global economic and financial conditions.

The final MPC policy meeting of 2013 is scheduled for November 27.

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

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