Bank of Thailand cuts key interest rate by 25 basis points in attempt to weaken the baht

Bangkok-

The Bank of Thailand unexpectedly cut its benchmark interest rate on Wednesday, August 7th, 2019 for the first time since 2015, which should support faltering growth and weaken the strong baht.

The Bank of Thailand’s monetary policy committee voted 5-2 to cut the one-day repurchase rate by 25 basis points to 1.50% – the level before it was hiked by the same amount in December, the first tightening since 2011.

The two dissenters in the voters favored a hold.

The committee said it was worried about the strength of the baht overall and the effect it was having on the economy and tourism.

In a Reuters poll, 14 out of 15 economists had predicted no change to policy while the other forecast a quarter-point cut, so this was a surprise to many analysts.

The baht is Asia’s best-performing currency this year, appreciating about 6% against the US dollar.
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