# Thai Baht Remains Stable Despite Central Bank Rate Cut

- Link: https://www.thailand-business-news.com/banking/169239-thai-baht-remains-stable-despite-central-bank-rate-cut
- Published: 2024-10-16T22:45:14+07:00
- Author: Olivier Languepin

The Thai Baht remained stable despite the Bank of Thailand’s unexpected decision
to cut the key interest rate by 25 basis points to 2.25%, a move that deviated from
the predictions of most economists.

 * The Bank of Thailand surprised the market by cutting its policy interest rate
   by a quarter point to 2.25%, the first rate cut since May 2020, in a move to 
   alleviate borrowers’ debt-servicing burden.
 * The Thai central bank’s decision was influenced by government pressure to support
   the economy, with a warning that further rate cuts might harm the economy in 
   the long term.
 * Across Asia, the Philippine central bank cut its policy rate by a quarter point
   to 6% while Bank Indonesia chose to maintain its policy rate at 6% to ensure 
   stability and foster economic growth in the face of ongoing uncertainties.

The Bank of Thailand surprised the market by cutting its policy interest rate by
a quarter point to 2.25%, aiming to ease borrowers’ debt-servicing costs. Despite
economists’ expectations for the bank to keep the rate unchanged, the Monetary Policy
Committee voted to lower it.

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The central bank’s action reflects a delicate balance between stimulating economic
activity and managing the risks associated with high household debt and the strength
of the Baht, which had surged by 14% in the previous quarter.

The decision was influenced by government pressure to support the economy, but the
central bank warned against further cuts that could harm the economy in the long
term. Thailand’s GDP growth forecast was raised to 2.7%, with expectations of a 
robust recovery in tourism and exports.

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The decision did not significantly impact the Thai baht. Additionally, the Philippine
central bank also cut its policy rate, while Bank Indonesia chose to keep its rate
unchanged to maintain stability amidst global uncertainties.