Bank of Thailand Cuts Interest Rate 25bps to 3.00%

The Bank of Thailand cut its benchmark 1-day bond repurchase rate by 25 basis points to 3.00% from 3.25%.  Bank of Thailand Assistant Governor, Mr. Paiboon Kittisrikangwan, said: "The MPC assessed that inflationary pressure remains contained, while headwinds from the global economy continue to pose  risks to Thailand's economic growth. The MPC therefore voted unanimously to reduce the policy rate by 0.25 percent, from 3.25 percent to 3.00 percent per annum, effective immediately. With  private sector confidence improving but still fragile, this policy accommodation should help accelerate the return of economic activity to normal levels."

The Bank of Thailand also cut the rate 25bps at its December meeting, and previously raised the rate to 3.50% at its August meeting, and increased the interest rate in July last year by 25 basis points to 3.25%.  Thailand reported headline inflation of 3.6% in December, down from 4.29% in August, 4.08% in July, 4.1% in June, compared to 4.19% in May, and 4.04% in April.  The Bank of Thailand has an inflation target range of 0.5% to 3.0%.  

The Thai economy grew 0.5% in the third quarter, after 0% growth in the June quarter, and 2% in the March quarter, placing annual GDP growth at 3.5% (2.7% in June, and 3.2% in the March quarter).  The Thai baht (THB) has weakened about 2% against the US dollar over the past year, while the USDTHB exchange rate last traded around 31.53

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