MPC to Slash More Policy Rate If Economy Drops Further, Says BOT’s Senior Director

The Bank of Thailand (BOT) can slash more policy rate in the upcoming meeting if the economic outlook is worse than forecast, stated Bank of Thailand Senior Director Don Nakornthab.

 

Mr. Don said that the rate decision will depend more on economic outlook than inflation ahead of the meeting on May 20, 2020, which comes two days after the announcement of the first quarter economic report.

Nevertheless, Thailand has not dipped into deflation territory yet as the decline in consumer price index is not yet prolonged and is not broad-based, said Mr. Don.

 

The Monetary Policy Committee (MPC) of Thailand has made an emergency rate cut in March to its historic low at 0.75% amid economic slowdown due to the coronavirus outbreak, then agreed to maintain the benchmark in its meeting a week after the cut.

BOT also introduced measures to support SMEs and stabilize the corporate bond market in April to alleviate the impact of the virus outbreak to have sufficient funding and liquidity to bridge through these testing times and retain their workforce as the SMEs are the backbone of the Thai economy and a primary source of employment.