BoT expected to cut rates twice more this year

Low inflation provides ample room for the Bank of Thailand to slash interest rates at least two more times this year to deal with the impacts of the trade war, with the next rate cut expected in the third quarter, according to analysts.

- NAREERAT WIRIYAPONG

The consumer price index fell by 0.22% in April, the first contraction in 13 months, according to data released by the Commerce Ministry on Tuesday. Analysts had predicted a 0.1% decline, according to KGI Securities (Thailand).

Burin Adulwattana, managing director and chief economist at Kasikorn Research Center (K-Research), said the central bank is projected to trim the rate “at least one more time” this year, following a cut of 25 basis points (bps) last month.

Aiming to revitalise an underperforming economy, the regulator on April 30 slashed its key interest rate by 25 bps for a second consecutive meeting this year. The latest cut brought the Thai policy rate to 1.75%, the lowest level in two years.