Thailand’s central bank will lower interest rates further to stimulate economic growth, Bank of Thailand governor Tarisa Watanagase said in an interview with the Wall Street Journal.
“Monetary policy will be accommodative going forward, so there will be further cuts,” said Tarisa, who was in Washington for a meeting of the International Monetary Fund.
The aggressive tone from Tarisa is unlikely to take the market by surprise, as analysts were already expecting further rate cuts given tame inflation and slowing economic growth.
The central bank last week cut the 1-day repurchase rate, its key policy rate, by 50 basis points to 4%.
The central bank had more reasons to use monetary policy “given that inflation risks are small and, on the other hand, risks to growth have increased,” Tarisa said.
She said the central bank would probably revise down its gross domestic product growth outlook in a forecast due on April 24 but added “any downward revisions shouldn’t be substantial”..
Separately, the Thai finance minister, Chalongphob Sussangkarn, said in an interview with the Financial Times published on Monday that efforts to boost the economy would fail to produce a “big spurt”. [nL15426746]
“We are going through a great deal of chaos,” the newspaper quoted the minister as saying. “We have to do what we can to stimulate the economy. But with all the political uncertainty, it’s not going to lead to a big spurt in economic growth.”