Bangkok, 8th August 2019 – The Bank of Thailand has made a surprise announcement of an interest rate decrease to 1.5%, the first in 4 years.
The Bank of Thailand’s Monetary Policy Committee (MPC) announced on Wednesday it is decreasing its benchmark interest rate from 1.75% to 1.50% amid concerns about the Thai baht’s strength.
The announcement is a surprise as it is the first rate cut since 2015 due to the less-than-expected economic expansion, exports and tourism slowing down.
For domestic demand, according to the Committee, private consumption is likely to drop according to household income and lower the employment rate, especially in export industries. However, production bases shifting to Thailand and public private investment in infrastructure will likely bolster the next phase of investment, however, the Committee will monitor an external risk from the escalating trade war.
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