BoT touts further monetary easing

Wants policy to be more accommodative

- SOMRUEDI BANCHONGDUANG NAREERAT WIRIYAPONG

The Bank of Thailand believes there is still room for further monetary easing, even after four consecutive policy rate cuts.

The central bank's Monetary Policy Committee (MPC) voted unanimously yesterday to lower the policy rate by 25 basis points (bps) to 1.50%, effective immediately.

MPC secretary Sakkapop Panyanukul said the committee wants monetary policy to be more accommodative to ensure financial conditions remain conducive to business adjustment, easing the burden on vulnerable groups such as small and medium-sized enterprises (SMEs) and low-income households.

In this current easing cycle, the central bank has lowered the policy rate four times by 100 bps starting in October last year, followed by cuts in February, April and August this year, each by 25 bps. The MPC left the rate unchanged at its June meeting.

Mr Sakkapop said the MPC expects the Thai economy to expand in line with previous projections for this year and next.

The 19% US tariff on Thai exports could provide a slight upside to GDP growth, he said.

The regulator forecasts GDP growth of 2.3% this year and will review projections for both 2025 and 2026 at its next MPC meeting in October, said Mr Sakkapop.

"Although second-quarter GDP growth this year is expected to surpass earlier estimates, the economy is likely to slow from the third quarter of this year into early next year," he said.