The Bank of Thailand reduced its benchmark 1-day bond repurchase rate by 25 basis points to 3.25% from 3.50%. Bank of Thailand Assistant Governor, Mr. Paiboon Kittisrikangwan, said: “The MPC assessed that the risk of a global economic slowdown has increased while consumer and business confidence remained weak. With upside inflation risks expected to be limited, the current accommodative monetary policy can provide further support to economic restoration and investment. The MPC therefore voted 5 to 2 to reduce the policy rate by 0.25 percent, from 3.50 percent to 3.25 percent per annum, with 2 votes in favour of a 0.50 percent reduction.”
The Bank of Thailand previously raised the rate to 3.50% at its August meeting, and increased the interest rate in July this year by 25 basis points to 3.25%, continuing a string of monetary policy tightening measures, with the repo rate now 125 basis points higher than the start of the year. Thailand reported core inflation of 2.92% in September, compared to 2.6% in June, 2.48% in May, and 2.07% in April, according to the Commerce Ministry. Headline inflation was 4.29% in August, 4.08% in July, 4.1% in June, compared to 4.19% in May, and 4.04% in April. The Bank of Thailand has an inflation target range of 0.5% to 3.0%.
The Thai economy contracted -0.2% in the second quarter, after growing 2% in the March quarter, placing annual GDP growth at 2.6% (3.2% in the previous quarter). The Thai baht (THB) has weakened about 2.5% against the US dollar this year, the USDTHB exchange rate last traded around 30.84
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