Thailand's central bank reduces policy rate to 1.5 pct

BANGKOK, Aug. 14 (Xinhua) -- Thailand's central bank reduced its key interest rate by 25 basis points on Wednesday, marking the fourth cut in 10 months, in support of a sluggish economy due to weak private consumption and global trade tensions.

The Bank of Thailand's monetary policy committee voted unanimously to lower the one-day repurchase rate from 1.75 percent to 1.5 percent, bringing borrowing costs to their lowest level since February 2023.

In a statement, the central bank said the Thai economy was projected to expand this year and next year close to the previous assessment, but U.S. trade policies would exacerbate structural problems and weaken competitiveness, particularly for vulnerable small businesses.

Looking ahead, the economic growth is expected to decelerate in the latter half of the year on the back of U.S. tariffs and a decrease in short-haul tourist arrivals, stemming from heightened regional competition, the statement said.

Secretary of the policy committee Sakkapop Panyanukul said that the monetary policy framework aims to maintain price stability, promote sustainable growth, and preserve financial stability.

"The committee views that monetary policy should be more accommodative to some extent to ensure that financial conditions are conducive to business adjustment and to help alleviate the burden of vulnerable groups," Sakkapop told a news conference.

The central bank also noted the importance of ensuring macro-financial stability while taking into account the limited policy space.■