BANGKOK, 12 March 2014 The Monetary Policy Committee (MPC) has adjusted the policy interest rate down from 2.25% to 2% per year in an attempt to provide support for the ailing economy.
Assistant Governor of the Bank of Thailand Paiboon Kittisrikangwan, in his capacity as Secretary of the MPC, disclosed that the MPC board voted 4 to 3 to bring down the policy interest rate by a quarter of a percentage point. As a result, the benchmark rate settled at 2% per annum.
Mr Paiboon said the committee’s decision was based on the projection that the prolonged political demonstrations would continue to hinder the national economy. With the core inflation edging up, it is hoped that the interest reduction will help stimulate public spending and shore up business confidence.
The MPC estimated the 2014 economic growth at less than 3% due to political uncertainty and shrinkage in government spending and investment. Mr Paiboon also noted that the Constitutional Court’s verdict to dispense with the government’s 2.2-trillion-baht loan bill for infrastructure development was within the MPC’s expectation.
