Thailand Gets Another Central Bank Interest Rate Cut

May 20, 2020

The Bank of Thailand has implemented its third 25-basis point policy interest rate cut of 2020 and fifth such move since August 2019. The one-week repo rate now becomes 0.50%. There were three dissenters on the policy-deciding 7-person committee who didn’t want this change. A released statement sets the context for this additional easing: ” the Committee assessed that the Thai economy would contract in 2020 more than the previous assessment due to the more-than-expected contraction of the global economy along with the containment measures worldwide. Headline inflation would be more negative than previously assessed. Financial stability would be more vulnerable given the economic outlook.” Despite the split decision, “the Committee would stand ready to use additional appropriate monetary policy tools if necessary” in order to mute the economic drag from the global pandemic.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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