BoT cuts key rate to record-low 1%

The Bank of Thailand (BoT) slashed its policy rate by 25 basis points to a fresh record low of 1% at this year’s first meeting in an effort to shore up an economy battered by the coronavirus epidemic and the months-long delay in the fiscal 2020 budget bill.

The Monetary Policy Committee (MPC) unanimously voted today to lower the benchmark rate by 0.25 percentage points a historic low of 1%, said the central bank’s statement.

The economic growth risk is now skewed more to the downside and the growth is likely below its potential, while financial stability becomes more fragile due to the economic slowdown, it said.

The one-day repurchase rate was trimmed by a quarter-point each in August and November last year in a bid to bolster the economy, whose 2019 growth is estimated at 2.5% — the weakest in five years.

The novel coronavirus outbreak and the postponement of the 3.2-trillion-baht budget bill have dealt further blows to an already sagging economy, and the central bank’s senior official said recently that both factors would have a significant impact on the economy, particularly in the first three months of 2020.

The BoT in mid-December downgraded the Thai economic growth for 2020 to 2.8% from 3.3% predicted in last September.