Bank of Thailand reduces interest rate to spur growth

Bloomberg

The Bank of Thailand unexpectedly cut its benchmark interest rate on Wednesday for the first time in more than four years to boost the economy, and said it sees more room to ease as global risks surge.
The Monetary Policy Committee voted five to two to cut its key rate by a quarter-percentage point to 1.5%, the central bank said in a statement. Just two of the 29 economists in a Bloomberg survey expected the cut, while the rest forecast no change.
The central bank earlier had resisted rate cuts, voicing concern about consumer debt and risks to financial stability. However, the economic outlook has deteriorated sharply in recent months amid escalating US-China trade tensions, a worsening drought and a surging currency, which is hurting exports and tourism. The baht has gained about 8% against the dollar in the past year, the best performer in Asia.
“Sluggish exports and domestic consumption will make it very tough for the Thai economy this year,” said PrapasTonpibulsak, chief investment officer at Talis Asset Management Co. in Bangkok. “We expect more cuts by the central bank through 2020 because it must keep easing monetary policy to make it more effective.”
The baht was trading down 0.1% at 3:29 p.m. in Bangkok. The benchmark SET index gained as much as 0.7%, its biggest advance in more than two weeks.