Thai central bank cuts key interest rate to 2.25 per cent

[webfact]

Thai central bank cuts key interest rate to 2.25 per cent
By English News



BANGKOK, Nov 27 - The Bank of Thailand (BoT) on Wednesday slashed its policy interest rate by 0.25 per cent, to 2.25 per cent, saying growth in the third quarter of this year was weaker than expected from both private and public spending.

The central bank's Monetary Policy Committee (MPC) voted 6 to 1 to reduce the policy rate from 2.50 to 2.25 per cent, with immediate effect. One member deemed current monetary policy stance to be sufficiently accommodative,

MPC Secretary Paiboon Kittisrikangwan announced the decision after the committee meeting.

"The growth of the Thai economy in the third quarter of 2013 was weaker than expected in both private and public spending. Recovery in exports has not gained traction," the committee said in its statement.

The MPC also warned about "higher downside risks to growth stemming from delay in government investment and fragile private confidence, which could be compounded by the ongoing political situation."

The decision came in the wake of escalating protests to topple the Yingluck Shinawatra government which spread outside the capital. Protesters rallied peacefully outside many provincial halls mainly in the opposition Democrat Party's stronghold in the southern region. The Pheu Thai-led government also faces a no-confidence debate in the lower house.

"In addition, exports might not benefit fully from prospective global economic recovery. Inflationary pressure remains subdued, while private credits decelerated in line with the economy," it said.

The committee judges that the Thai economy is expanding at a slower pace than previously assessed, with greater downside risks compared with the last meeting. Given the benign inflation outlook and moderating household credit growth, there is room for the monetary policy to mitigate downside risks to the economy.

The global economy continued to recover, led by expansion in the major economies, particularly that of the United States. High uncertainty in the outlook for American monetary and fiscal policies continues to weigh on global financial market stability.

The Chinese economy expanded well across all sectors, while the regional economies continued to grow gradually.

Exports of the North Asian economies recovered in tandem with the major and Chinese economies, and at a more robust pace than those of Thailand's ASEAN peers. (MCOT online news)


-- TNA 2013-11-27

[rucus7]

".......BANGKOK, Nov 27 - The Bank of Thailand (BoT) on Wednesday slashed its policy interest rate by 0.25 per cent, to 2.25 per cent, saying growth in the third quarter of this year was weaker than expected from both private and public spending...." Can't spend what you don't have. especially when inflation is factored in. ........ "The global economy continued to recover, led by expansion in the major economies, particularly that of the United States. High uncertainty in the outlook for American monetary and fiscal policies continues to weigh on global financial market stability.' ..........What recovery might that be? Although high uncertainty is accurate.

[Pib]

"The growth of the Thai economy in the third quarter of 2013 was weaker than expected in both private and public spending. Recovery in exports has not gained traction," the committee said in its statement.

The MPC also warned about "higher downside risks to growth stemming from delay in government investment and fragile private confidence, which could be compounded by the ongoing political situation."

Wonder how the govt will spin this rate cut as a good thing. Maybe something along the lines of "the rate cut with help accelerate growth" which implies the economy is moving along OK and will soon go faster due to the rate cut.

But hey, for those of us exchanging our home country currency into baht it should give us a few more baht in the exchange process...that's a good thing.

[pistachios]

Thailand hasn't published PIB Q3 has it? It must be pretty bad, on par with Q1 and Q2 numbers and totally out of touch of 2013 growth predictions, as it was published last year at the beginning of november...

[Hugh Jarse]

"The growth of the Thai economy in the third quarter of 2013 was weaker than expected in both private and public spending. Recovery in exports has not gained traction," the committee said in its statement.

The MPC also warned about "higher downside risks to growth stemming from delay in government investment and fragile private confidence, which could be compounded by the ongoing political situation."

Wonder how the govt will spin this rate cut as a good thing. Maybe something along the lines of "the rate cut with help accelerate growth" which implies the economy is moving along OK and will soon go faster due to the rate cut.

But hey, for those of us exchanging our home country currency into baht it should give us a few more baht in the exchange process...that's a good thing.

How will this cut impact on inflation? Already ridiculously high in my neck of the woods.

[Khun Jean]

The almighty 'growth'.

It is actually like a cancer. Nothing can grow forever, including a economy.

Growing until it crashes and the growing it again is only good for a certain group of people. The rest looses a lot and have to rebuild. Cycle after cycle.

Sustaining it and allowing low deflation would be a wiser more humane strategy.

But what do i know, Krugman said growth is good and he won the nobel price, so he must be right.

Edited November 27, 2013 by Khun Jean

[Pib]

 

"The growth of the Thai economy in the third quarter of 2013 was weaker than expected in both private and public spending. Recovery in exports has not gained traction," the committee said in its statement.

The MPC also warned about "higher downside risks to growth stemming from delay in government investment and fragile private confidence, which could be compounded by the ongoing political situation."

 

 

Wonder how the govt will spin this rate cut as a good thing.   Maybe something along the lines of "the rate cut with help accelerate growth" which implies the economy is moving along OK and will soon go faster due to the rate cut.

 

But hey, for those of us exchanging our home country currency into baht it should give us a few more baht in the exchange process...that's a good thing.

 

 

How will this cut impact on inflation? Already ridiculously high in my neck of the woods.

 

Inflation is not high in any part of Thailand!!!!...just ask the govt backed up by their their offical inflation rates. It's all in your mind...just ask the govt.

Sent from my Onda V971 tablet

[phitsanulokjohn]

Good news for your pound/dollar.

[Ulic]

With 99.95 % employment not sure any response was required, but I would be happy if they

lowered it further to weaken the baht.