Thursday, March 28, 2024
HomeeconomyRate cut talk growing in Thailand

Rate cut talk growing in Thailand

Growing signs that political limbo in Thailand is taking a toll on the economy raises pressure on the Bank of Thailand (BOT) to pull the rate-cut trigger as soon as its next meeting, analysts say.

Thailand's central bank resisted the urge to lower interest rates at its last meeting in January – contrary to expectations for monetary easing against a backdrop of political turmoil that has harmed tourism and investor confidence.

(Read more: Thailand cuts 2014 growth forecast to 3-4%)

Data on Monday showing the Thai economy, the second biggest in Southeast Asia, grew 2.9 percent last year compared with a 6.5 percent rise in 2012 may sway the BOT when it next meets on March 12.

"A rate cut next month remains a distinct possibility for two reasons," said Vishnu Varathan, a market economist at Mizuho Corporate Bank in Singapore. "The GDP (gross domestic product) data was disappointing and forward-looking indicators are also weak, so from a monetary policy perspective it makes sense to front load that rate cut."

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