Connect with us

Banking

Bank of Thailand cuts rate by 0.25% to 1.25 per cent

The latest cut brings the Bot’s policy rate to an historical low, which the bank maintained from April 2009 to July 2010 during the subprime global financial crisis.

Bahar Karaman

Published

on

​On 6 November 2019, the MPC voted 5 to 2 to reduce the policy rate by 0.25 percentage point from 1.50 to 1.25 percent, effective immediately. Two members voted to maintain the policy rate at 1.50 percent.

The latest cut brings the Bot’s policy rate to an historical low, which the bank maintained from April 2009 to July 2010 during the subprime global financial crisis.

The rate cut is also seen as a measure to stem the baht’s rise as the Thai currency touched 30.15 against the dollar on Oct. 25, its highest point since May 2013, creating headaches for Southeast Asia’s second-largest economy, which relies heavily on exports and tourism. 

Officials told reporters in Bangkok that the central bank is worried about the strength of the baht, which may continue to weigh on the economy. The bank will ease rules on outflows and consider further steps to rein in the currency, they said.

In a press release dating from Oct. 31, the central bank noted that

In September 2019, the Thai economy continued to be on a decelerating trend. The value of merchandise exports continued to contract, consistent with the economic slowdown of trading partners. Manufacturing production and private investment indicators deteriorated. Private consumption indicators expanded at a similar pace compared with the previous month. Nonetheless, public spending rebounded from capital expenditures. The tourism sector also continued to expand mainly thanks to an increase in the number of Chinese and Indian tourists.

After three quarters, the global economic slowdown and the ongoing trade war between China and the United States, are still having an adverse impact on the Thai economy.

Last week the Ministry of Finance cut the country’s economic growth outlook to 2.8%, from the previous 3%.

The revocation of the Generalized System of Preferences (GSP) on Thai products by the United States will affect the export sector, but Thailand still has six months to prepare and negotiate. With support from the government’s fiscal budget of 3.2 trillion baht, the FPO forecasts that the export sector will grow 2.6% next year, with the Thai economy expanding 3.3%.

Comments

Banking

APAC corporates likely to improve in 2021

Moody’s Investors Service says in a new report that credit conditions in APAC will improve in 2021, supported by the gradual recovery of economic activity given the early containment of the pandemic in several Asian economies.

Pr News

Published

on

By

Ongoing fiscal and monetary support in both advanced and emerging markets will also aid improving conditions, but renewed lockdowns in parts of the world have stalled the nascent global economic recovery and create uncertainty around improving credit conditions.

(more…)
Continue Reading

Banking

Can Fintech drive a strong post-COVID-19 recovery in Asia?

The pandemic has highlighted the power of digital technology. Now is the time to harness this power for inclusive growth so that communities, especially in poor and remote areas, can survive the crisis and thrive.

Asian Development Bank

Published

on

To say 2020 has been a challenging year is a massive understatement. The COVID-19 pandemic has quickly undermined development gains from recent decades and slowed growth in many Asian economies.

(more…)
Continue Reading

Banking

BoT sees mild impact of new COVID-19 wave on the economy

The Bank of Thailand (BoT) does not see the new wave of COVID-19 infections as having as much of an impact on the economy as the first wave, as fewer businesses have had to be suspended.

National News Bureau of Thailand

Published

on

BANGKOK (NNT) – Despite a new and wider wave of COVID-19 infections in the country, the Bank of Thailand (BoT) has assessed that the economic impact of the situation will not be as severe as the first wave as the effects of the virus are not as pronounced, and public health preparations, including plans for vaccination, are in place.

(more…)
Continue Reading

Latest

Most Viewed

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 13,632 other subscribers

Trending