Thailand votes to decrease policy rate to 2¾%, economic outlook weak

By Tali David

Minneapolis, Oct. 17 - The Monetary Policy Council of the Bank of Thailand voted five to two at a meeting on Wednesday to reduce the policy rate to 2¾% from 3% with two votes in favor of maintaining the rate, according to a bank press release.

The rate last was cut from 3¼% in January.

In the release, assistant governor Paiboon Kittisrikangwan said that the global economic outlook remained weak, although further monetary policy easing in major economies helped to support global financial market sentiment and latest indicators pointed toward some improvements in U.S. housing and labor markets.

The Thai economy continued to expand in the third quarter, although the impact of softer global demand on exports and export production had become more apparent. The committee assessed that the global economy would gradually improve next year, but the substantial degree of uncertainty surrounding the outlook could hamper exports in the period ahead.

With upside risk to inflation contained, the council said the majority of its members deemed that monetary policy easing was warranted to shore up domestic demand in the period ahead and ward off the potential negative impact from the global economy, which remained weak and fragile.

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