Thai central bank seen cutting key rate to help economy in recession

[snoop1130]

Thai central bank seen cutting key rate to help economy in recession

By Orathai Sriring

 

FILE PHOTO: The Bank of Thailand logo is seen in Bangkok, Thailand April 26, 2016. REUTERS/Jorge Silva/File Photo

 

BANGKOK (Reuters) - Thailand’s central bank is widely expected to cut its benchmark interest rate to a new low at its policy review on Wednesday to cushion the economy from the impact of the coronavirus outbreak.

 

Sixteen of 18 economists in the poll predicted the Bank of Thailand’s (BOT) monetary policy committee would cut its one-day repurchase rate THCBIR=ECI by 25 basis points to 0.50% - which will be the fifth reduction in borrowing costs since August.

 

The other two economists forecast the central bank would keep the rate at 0.75%, the lowest on record.

 

The BOT left the rate unchanged at its March 25 meeting after cutting it by a quarter point at a special meeting on March 20, saying the effects of the pandemic would be more severe than previously expected.

 

On Monday, Thailand reported its economy contracted 1.8% in the first quarter from a year earlier, and 2.2% from the December quarter, as social restrictions to halt the spread of the pandemic hit tourism and domestic activity.

 

The National Economic and Social Development Council (NESDC), which complies GDP data, slashed its 2020 GDP outlook to a 5.0-6.0% contraction from growth of 1.5-2.5% seen earlier, with exports expected to fall 8%.

 

In March, the BOT forecast the economy would shrink 5.3% this year, the deepest contraction since the 1997-98 Asian financial crisis.

 

“We continue to look for another easing of 25 bps in this meeting,” said Kobsidthi Silpachai, head of capital markets research at Kasikornbank.

 

“The NESDC forecasts are painting that the economic outlook will get worse before it gets better,” he added.

 

Tim Leelahaphan, economist at Standard Chartered Bank, predicts a quarter point cut this week and a similar reduction in the third quarter.

 

But some think policymakers may want to wait to assess the effects of government and central bank steps introduced to mitigate the impact of the virus, which had also prompted banks to cut their lending rates.

 

“We think the policy rate could go lower this year, but it may not be at this time,” said Phacharaphot Nugtramas, economist at Krung Thai Bank.

 

Thailand has reported 3,031 confirmed cases and 56 deaths since the outbreak started in the country in January.

 

The government on Sunday opened malls and department stores for the first time since March in its second phase of relaxing measures as the number of coronavirus cases slowed.

 

-- © Copyright Reuters 2020-05-18

 

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[smedly]

too little too late 

[tonray]

and in other news...the baht continues to gain against the US Dollar......

[worgeordie]

More help for those in debt, how things change,

when i first came here,i was getting 15% + and one

time 18% ,on fixed deposits,now interest offered

do not even cover inflation,no wonder so many

in debt,there is no incentive to save.

 

regards Worgeordie

[Oldie]

1 hour ago, worgeordie said:

More help for those in debt, how things change,

when i first came here,i was getting 15% + and one

time 18% ,on fixed deposits,now interest offered

do not even cover inflation,no wonder so many

in debt,there is no incentive to save.

 

regards Worgeordie

They are still better than the EZB with their negative interest rates. There you have to pay if you want to save. But this seems to be accepted by the governments and the people there...

[Stargeezr]

Some countries have had low interest for over 5 years, and many people are

still in debt way more than they should be. Credit card companies are

no help as almost anyone can get them and they have high interest, it also

seems that the simple people forget about this until they are past their necks

in debt to credit card companies.  Hi  loan sharks!  I still remember getting

a vehicle loan for 12 percent at a bank. Today I am debt free and thankful for

it.

Geezer

[Baerboxer]

4 hours ago, tonray said:

and in other news...the baht continues to gain against the US Dollar......

 

Which shows how the Forex professional traders currently view the USD, as well as the GBP, Euro, etc.

 

[finnishmen]

thai economy help lot if current rate make today 1;35 to 1;50 then foreigns come invest in thailand, thais not can live whit out foreigns, ifend and bann all foreigns expeats and busines many million thaqi not have work, newermind if die but better have goverment change idiot visa and busines and work permit laws and come to normal human country same what all europe have. now thailand live cavemen pre-history time and idiots not change law future

[Acharn]

7 hours ago, tonray said:

and in other news...the baht continues to gain against the US Dollar......

This may help. They can dare to do it now, since the U.S. cut their overnight rate to 0.0-0.25%. Before the U.S. did that they feared being punished as currency manipulators. It's not at all clear to my what's causing the current rise in the baht, other than a general, world-wide recognition that the U.S. is governed by clowns, but I don't know if other currencies are also strengthening against the dollar. I guess that's why I'm not rich.