Thai central bank cuts interest rate

thai-money2The Bank of Thailand in its monetary policy committee meting  on May 29 cut the benchmark interest rate by a quarter of a percentage point to 2.50 per cent from 2.75 per cent. The move was preceded by concerns about a strong baht that could hamper economic growth and export earnings and pressure by industry groups and the Thai finance minister to curb the baht’s appreciation.

The central bank also said it is ready to implement capital controls if necessary to contain the strength of Thailand’s currency. The move provides some relief for exporters struggling with the rise of the baht.

Many economists had predicted a modest rate cut after Thailand’s economy contracted by a seasonally adjusted 2.2 per cent in the first three months of 2013 compared to the previous quarter.

Finance Minister Kittiratt Na-Ranong has pressed repeatedly for sharper interest rate cuts.

Possible measures for capital controls include requiring foreigners to hedge some of their investments in baht-denominated assets and curtailing short-term investments in government bonds, which have attracted a surge of overseas investment this year after Japan began loosening its own monetary policy to drive down the value of the yen.

The baht weakened after the central bank’s decision and hovered around 30.15 to the US dollar on the evening of May 29 after the news became public. The baht also lost against other major currencies, for example the euro whose value against the baht rose above 39:1 for the first time since February 2013.



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The Bank of Thailand in its monetary policy committee meting  on May 29 cut the benchmark interest rate by a quarter of a percentage point to 2.50 per cent from 2.75 per cent. The move was preceded by concerns about a strong baht that could hamper economic growth and export earnings and pressure by industry groups and the Thai finance minister to curb the baht's appreciation. The central bank also said it is ready to implement capital controls if necessary to contain the strength of Thailand's currency. The move provides some relief for exporters struggling with the rise of the...

thai-money2The Bank of Thailand in its monetary policy committee meting  on May 29 cut the benchmark interest rate by a quarter of a percentage point to 2.50 per cent from 2.75 per cent. The move was preceded by concerns about a strong baht that could hamper economic growth and export earnings and pressure by industry groups and the Thai finance minister to curb the baht’s appreciation.

The central bank also said it is ready to implement capital controls if necessary to contain the strength of Thailand’s currency. The move provides some relief for exporters struggling with the rise of the baht.

Many economists had predicted a modest rate cut after Thailand’s economy contracted by a seasonally adjusted 2.2 per cent in the first three months of 2013 compared to the previous quarter.

Finance Minister Kittiratt Na-Ranong has pressed repeatedly for sharper interest rate cuts.

Possible measures for capital controls include requiring foreigners to hedge some of their investments in baht-denominated assets and curtailing short-term investments in government bonds, which have attracted a surge of overseas investment this year after Japan began loosening its own monetary policy to drive down the value of the yen.

The baht weakened after the central bank’s decision and hovered around 30.15 to the US dollar on the evening of May 29 after the news became public. The baht also lost against other major currencies, for example the euro whose value against the baht rose above 39:1 for the first time since February 2013.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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