Thailand cuts policy rate to a record low of 1%

BANGKOK: Thailand’s central bank today announced a policy rate cut for the third time in six months following concerns over slow economic growth due to the 2019 novel coronavirus outbreak and delay in the fiscal 2020 budget bill.

Bank of Thailand’s monetary policy committee (MPC) voted unanimously at its first meeting for the year to slash the policy rate by 25 basis points to a fresh record low of 1.0% with immediate effect. It is the lowest since 2010.

MPC secretary Titanun Mallikamas said the committee expects the Thai economy to expand at a slower rate in 2020 than previously forecast and much further below its potential in the wake of the health threat.

He said the coronavirus outbreak, a drought and a delay in passing the fiscal budget would potentially affect a large number of businesses and employment. Tourism figures are also expected to grow at a much lower rate than the previous forecast.

“Exports of goods will decline in line with trading partner economies and potential impacts of regional supply chain disruptions,” he said in a statement.

The bank had cut the rate by 25 basis points each in August and November last year.

“The committee will stand ready to use policy tools as appropriate. In addition, the committee will monitor structural problems that affect competitiveness and economic growth outlook, which should be firmly addressed by all related parties,” Titanun added.

The new coronavirus has taken a toll on Thailand’s tourism industry following travel bans on Chinese visitors to the country.

The Tourism Authority of Thailand anticipates Chinese tourist arrivals to drop by as much as 80% to 2.32 million in the first four months of the year, causing an estimated 98 billion baht (RM13.03 bil) loss in revenue. – Feb 5, 2020, Bernama

Subscribe and get top news delivered to your Inbox everyday for FREE