Pundits upbeat on monetary-fiscal fusing

The Bank of Thailand’s rate cut this week, earlier than analysts expected, is a “positive surprise” sending a signal that monetary and fiscal policies should work more coherently from now on to prop up a subdued economy, note analysts.

- NAREERAT WIRIYAPONG

The Monetary Policy Committee's (MPC) decision on Wednesday to trim the policy rate by 25 basis points (bps) to 1.00% is aimed at supporting the new government's fiscal policy-led investment, said Suwat Wattanapornprom, head of the research division at Krungsri Securities (KSS).

The move comes as a new cabinet is taking shape, with the Election Commission certifying the first batch of 396 constituency MPs from the Feb 8 general election.

The endorsement of winning MPs less than three weeks after the poll is early, given the 60-day post-election dateline, he said.

“We assess this as positive and view domestic politics as progressing,” Mr Suwat noted.