On Wednesday, Thailand’s Finance Minister urged the central bank to push for a cut in key interest rates ahead of the scheduled meeting next week, where they would discuss inflation targets and strong baht.
The meeting came about after months of the government demanding the Bank of Thailand (BOT) a cut in interest rates to help boost economic growth after it was still struggling to recover from the pandemic.
Pichai Chunhavajira, Deputy Prime Minister, said that discussing inflation targets will help set up monetary and fiscal policies to be on the same page, while high interest rates will make the government’s stimulus program difficult to implement.
Since 2020 the inflation target has always been around 1% to 3%, this year, on the other hand, saw the rate below that usual range. Pichai remarked that a review could make a rate cut more compelling.
The review in August resulted in the central bank maintaining the rate at 2.50% for a fifth consecutive meeting. The central bank reasoned that the rate is at a neutral level and not high by global standards.
Also on Wednesday, the government commenced the first phase of its THB 450 billion stimulus plan in a bid to increase economic growth to the expected 2.6% within this year, after last year having grown by only 1.9%, which has fallen behind its neighbor.
