Bank of Thailand Cuts Interest Rate to 2.25% for First Time Since 2020

Oct 17, 2024, 06:36 AM

The Bank of Thailand's Monetary Policy Committee (MPC) has made a surprising decision to lower the policy interest rate by 0.25% to 2.25%, marking the first cut since 2020. The decision, which was voted 5-2, comes despite earlier expectations that the rates would remain unchanged. This move aims to ease the financial burden for debtors and stimulate the economy, which is driven by consumption, tourism, exports, and stimulus measures. Following the rate cut, Thai stocks surged, with the Stock Exchange of Thailand (SET) rising as much as 1.2% to 1,482.42 points, the highest since late September 2023, with a net purchase of more than 4 billion Baht by foreign investors. The central bank also revised its export growth forecast for 2024 to 2.8%, up from 1.8% seen in June, and expects foreign tourist arrivals to reach 36 million this year. The Ministry of Finance plans to discuss inflation targets with the central bank later this month.