The Bank of Thailand (BOT) came to a resolution to lower its key interest rate during a policy review on Wednesday, with a 6 to 1 vote, opting to decrease the one-day repurchase rate by 25 basis points to 2.00%.
This came as a surprise for analysts as the adjustment defied widespread market forecasts that anticipated the rate would remain steady at 2.25%.
According to the statement made by the committee, the Thai economy is anticipated to grow at a lower rate than previously assessed due to pressures on industrial production stemming from structural problems and competition from foreign goods. Additionally, there is an increased risk from trade policies of major economies.
Although the economy is supported by domestic demand and tourism, most committee members have agreed to reduce the policy interest rate by 0.25% per annum in this meeting. This decision aims to align financial conditions with the economic outlook, inflation, and financial system stability, while also addressing more pronounced downside risks.
