Policy rate cut on local & global uncertainties
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Bank of Thailand's decision to cut the policy rate today indicates growing concerns over the global economy.
Its bias is shifted from inflation to growth, as inflation in December eased.
The central bank attributed the cut to the higher-than-expected flood impacts particularly on the manufacturing sector. Moreover, Thailand's export could also be affected by the eurozone crisis.
The euro zone is expected to show growth of only 0.5-1 per cent this year.
The policy rate was cut by 25 basis points to 3 per cent.
Siam Commercial Bank supported the move, saying that it should help boost the economy. It also expects more cuts if global condition worsens.
TMB Bank expects one more 25-basis points cut in the first half, and the rate should stay at 2.75 per cent through the end of this year.
