Thai c. bank cautious on rate cuts despite govt. pressure

Thailand’s central bank, the Bank of Thailand (BOT), remains cautious on cutting interest rates despite pressure from the government, Reuters reported on Monday, citing Deputy Governor Alisara Mahasandana.

The bank prioritises balancing short-term economic needs with long-term growth prospects, Mahasandana told Reuters.

Mahasandana, speaking at the International Monetary Fund and World Bank Spring Meetings, acknowledged the Thai government’s call for rate cuts.

Prime Minister Srettha Thavisin believes lower rates would help manage household debt and navigate the slowdown in China, a key trading partner.

However, Mahasandana emphasised the BOT’s monetary policy committee (MPC) prioritises a holistic approach. We value input from all stakeholders, she said, but decisions weigh both short-term and long-term impacts on the economy.

As of April 10th, the BOT maintained its key interest rate at 2.5 per cent, the highest level in over a decade. The next review is scheduled for June 12th.

The central bank forecasts Thailand’s economy to grow 2.6 per cent in 2024 and 3.0 per cent in 2025, building on the modest 1.9 per cent growth of 2023.