MPC lowers policy rate amid negative factors
The Monetary Policy Committee (MPC) of the Bank of Thailand voted unanimously to cut the policy rate by 0.25 percentage point from 1.25 per cent to 1 per cent, effective immediately, at its meeting on Wednesday (February 5), said the committee's secretary Titanun Mallikamas.
He added that the reduction was in line with MPC's estimate that Thai economy growth would be lower than its previous forecast, due mainly to the new coronavirus outbreak, delay of the 2020 fiscal budget disbursement and drought.
According to the central bank statement on Wednesday, the MPC would keep a close watch on economic growth, inflation and financial stability relative to the risks of the coronavirus outbreak, delay to enactment of the Annual Budget Expenditure Act, and the drought. These will be taken into consideration in deliberating monetary policies.
The committee stands ready to deploy policy tools if needed. In addition, the MPC would monitor structural problems that impair competitiveness and economic growth, to be addressed by all related parties.
The Joint Standing Committee on Commerce, Industry and Banking has revised downward the country's gross domestic product (GDP) growth this year to between 2 per cent and 2.5 per cent from the previously projection of 2.5 to 3 per cent, according to its statement on Wednesday.
TMB Analytics, an economic analysis division of TMB Bank, has also revised downward its 2020 GDP forecast for Thailand to between 1.7 per cent and 2.1 per cent from 2.7 per cent, due to the impacts from the virus outbreak, the drought, and the delayed budget disbursement.
The Cabinet on Tuesday (February 4) approved the Finance Ministry’s proposed measures to mitigate the impact of the novel coronavirus outbreak and global uncertainties on the tourism sector.
