Thailand’s SET Index saw a significant surge in the afternoon trading session after the Bank of Thailand unexpectedly cut interest rate by 25 basis points.
SET Index rose 10 points or 0.68% to 1,474.95 right after the opening bell of the afternoon session.
In an unexpected turn of events, Thailand’s central bank, the Bank of Thailand (BOT), decided to lower its key interest rate during a policy review on Wednesday. This move, which has been advocated for by the government to stimulate a sluggish economy facing below-target inflation, marks a significant shift in monetary policy.
The BOT’s monetary policy committee, with a 5 to 2 vote, opted to decrease the one-day repurchase rate by 25 basis points to 2.25%. This adjustment comes after maintaining a decade-high rate of 2.50% since September 2023.
The decision to cut the interest rate caught many by surprise, as only four out of 28 economists surveyed by Reuters had anticipated a quarter-point reduction this week. Conversely, the majority of economists, numbering twenty-four, had expected no alterations to the existing policy.
The last modification in policy occurred in September of the preceding year when there was a 25 basis point increase in the interest rate. The recent rate cut reflects the BOT’s proactive approach to addressing economic challenges and fostering growth in the face of prevailing economic conditions.
