In an unexpected move, Thailand’s central bank has cut the key policy interest rate for the first time since 2020. Minutes from the Bank of Thailand’s October 16 meeting reveal the Monetary Policy Committee decided to lower the one-day repurchase rate by 25 basis points to 2.25%, aimed at addressing tightening financial conditions and supporting household debt alleviation.

 

The decision, approved by a 5-2 majority, focuses on mitigating the impact of stringent financial scenarios on the nation’s economic health. The central bank aims to facilitate a smoother path for household debt reduction, considering Thailand's high household debt-to-GDP ratio of 89.6% as of the second quarter.

 

In a prepared paper, the BoT identified domestic demand and tourism as critical drivers for future economic growth. The bank adjusted its GDP growth projections slightly upwards for 2024 and 2025, acknowledging the previous year's slower growth of 1.9%.

 

The bank maintains that while rates should be neutral to match economic potential, vigilance is necessary to prevent long-term imbalances. All eyes are on the next rate review on December 18, as Thailand continues to navigate a complex economic landscape.

 

File photo for reference only

 

-- 2024-10-30

 

 

Just to avoid any potential confusion for members, this is not another rate cut just a report that the official meeting minutes from 16/10 meeting (which cut rates) have been released.

 

If you are interested to read them, here's the link :

 

https://www.bot.or.th/en/our-roles/monetary-policy/mpc-meeting.html