Interest rate cut can’t be ruled out, says Bank of Thailand official

By The Nation

 

 

A senior Bank of Thailand official, Don Nakornthab, said on Wednesday that he believes the rate-setting Monetary Policy Committee has not shut the door on a possible interest rate cut this year.

 

Don, the senior director of the central bank’s economic and policy department, made the remark at a seminar on the economic outlook for the second half of this year. The event was hosted by KBank Private Banking.

 

Don said that earlier the committee had viewed that the economy would expand 3.3 per cent this year on the assumption that export growth would be flat.

 

However, the committee later was of the view that exports could experience a contraction this year, which would affect the economy. If the economic outlook becomes worse than expected, the committee might consider adjusting monetary policy as it deems fit.

 

On Tuesday some economists said they believed that the central bank would keep the policy rate unchanged for the rest of this year.

 

Source: http://www.nationthailand.com/business/30372238

 

-- © Copyright The Nation Thailand  2019-07-03

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Can't be ruled out...........With exports dropping almost as much as tourism spending it should be a certainty. 

11 hours ago, snoop1130 said:

However, the committee later was of the view that exports could will experience a contraction this year, which would affect the economy. If the economic outlook becomes worse than expected predicted , the committee might will consider adjusting monetary policy as it deems fit.

 

11 hours ago, snoop1130 said:

possible interest rate cut this year

Whoo hoo more Thai household debt coming right up !

Well, BoT has to make a choice: cut interest rates very soon, to slow hot money ( from mysterious source they won’t name).  Or continue to accept hot $$ and watch expats, export industry, and tourism diminish (or simply move to Vietnam).

If exports take a huge dive, which they will with the exchange rates as they are, compounded by a tourism drop which hitting bars, restaurants, and the sex trade moving overseas the Thai government will have to do something.

Hurt the rich Thais or stop the slide, tough choices ahead!

Buy now, pay later....borrow , borrow, borrow ! 

Debt Bomb! 

It is astonishing they have not cut rates already given how poorly the economy is doing, with no sign of any recovery on the horizon. But as others suggest, the short term high of fast money is very addictive. The baht remains well above where it should be given the state of the economy (leaving the political mess aside), but the high interest rates are propping it up. Take that away and the baht will fall to maybe 33 or more to the $. 

But when was the last time the BoT did the responsible thing???

59 minutes ago, hotchilli said:

If exports take a huge dive, which they will with the exchange rates as they are, compounded by a tourism drop which hitting bars, restaurants, and the sex trade moving overseas the Thai government will have to do something.

Hurt the rich Thais or stop the slide, tough choices ahead!

They are not noted for doing what is sensible and rational. 

1 hour ago, Isaan sailor said:

Well, BoT has to make a choice: cut interest rates very soon, to slow hot money ( from mysterious source they won’t name).  Or continue to accept hot $$ and watch expats, export industry, and tourism diminish (or simply move to Vietnam).

BoT had that choice 2 years ago when the baht was up more than 8% against the dollar!

• The Finance Ministry push the Bank of Thailand to cut interest rates to stimulate growth, in light of the strength of the currency and low inflation.

BoT's excuse then:

•  “Cutting the policy rate now would go against the grain of BOT’s priority to minimise financial stability risks, not to mention that it will be seen as undermining its independence.”

BoT's solution then:

• curb the supply of short-term bonds to limit the baht’s gains [same solution recently applied!)

https://www.bangkokpost.com/business/1327155/baht-pits-bank-of-thailand-against-government-on-rate-cut

 

We can only hope these mysterious hot money trader(s) don’t offer kickbacks—to keep this going...

Should have been CUT last time, NOT hiked...and cut again this go-round.