Rate cut likely at MPC meeting next week

Domestic outlook faces many pressures

- NUNTAWUN POLKUAMDEE

Analysts expect the Bank of Thailand’s Monetary Policy Committee (MPC) to cut its policy rate by 0.25 basis points (bps) at next week’s meeting, following the US Federal Reserve's latest move as multiple pressures weigh on the domestic outlook.

The Fed’s rate cut has lifted global sentiment and boosted risk appetite, despite lingering volatility in some markets, they said.

The Federal Open Market Committee voted 9-3 on Wednesday to lower the benchmark federal funds rate by a quarter point to a range of 3.5%-3.75%.

According to Paradorn Tiaranapramote, first vice-president of research at Asia Plus Securities (ASPS), the MPC is likely to cut the policy rate on Dec 17 by 0.25 bps to 1.25%. He said such a move could support a year-end recovery in Thai equities.

The case for a rate cut is reinforced by Thailand’s negative inflation — which remained at minus 0.49% in November, marking eight consecutive months below zero — along with flood-related damage in the South and rising geopolitical risks along the Cambodian border that could hurt tourism.