Thailand: Bank of Thailand lowers policy rate in emergency meeting
On 20 March, the Monetary Policy Committee of the Bank of Thailand (BoT) held an emergency meeting and opted to cut the policy rate by 25 basis points to 0.75% from 1.00%.
The decision was influenced by a more severe economic impact from the coronavirus outbreak than previously estimated. Moreover, the pandemic has caused liquidity concerns for companies and the Bank’s rate cut was aimed at reducing firms’ interest burdens and supporting liquidity in financial markets, thereby cushioning the fallout from the viral outbreak somewhat. The Bank also stressed the importance of financial institutions actively addressing liquidity issues of borrowers—particularly SMEs and households—and increasing debt restructuring.
In the press release, the Committee struck a dovish tone and stated that it “would ensure sufficient liquidity, as well as the well-functioning and stability of the financial markets”. As such, further rate cuts are possible going forward.
The next monetary policy meeting is scheduled for 25 March.