Bank of Thailand Cuts Rate to 2 Percent

The Bank of Thailand cut its benchmark interest rate by 0.25 percentage points to 2%, its lowest level in three years.

The move comes amid continuing political turmoil in the country.

It is the second rate cut since November, as the bank tries to encourage spending after a slowdown in economic growth.

“Downside risks to growth have risen” in the wake of the prolonged political situation, the central bank said in a statement.

Thailand’s economic growth has slowed recently, to just 0.6% in the last quarter of 2013 from 2.7% in the previous quarter.

The bank noted that tourism had been particularly hard hit.

However, it added that it was optimistic about growth in the region helping Thailand’s economy.

“Prolonged political uncertainties would continue to impede the recovery of private consumption and investment. Nonetheless, exports of goods should gradually improve on the back of a recovery in major economies,” the bank wrote.

Prime Minister Yingluck Shinawatra has faced months of protests aimed at ousting her elected government and installing an unelected “people’s council” to oversee reforms.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza