BoT says closely monitoring situation after Fed rate cut

BoT says closely monitoring situation after Fed rate cut

The Bank of Thailand is closely monitoring the situation following an emergency interest rate cut by the Federal Reserve. (Bangkok Post photo)
The Bank of Thailand is closely monitoring the situation following an emergency interest rate cut by the Federal Reserve. (Bangkok Post photo)

The Bank of Thailand (BoT) said on Wednesday it was closely monitoring the situation and will act as appropriate following an emergency interest rate cut by the Federal Reserve.

However, the central bank said in a statement it had already taken action, cutting the policy rate on Feb 5 to alleviate the negative impact of the coronavirus epidemic and introduced measures to support liquidity for businesses and households.

The BoT cut the key rate by 25 basis points to a record low of 1% last month, the third reduction in six months to support flagging economic growth.

It will next review monetary policy and provide updated economic forecasts on March 25. Some analysts see another cut.

Tim Leelahaphan, economist at Standard Chartered Bank, said he expected another 25 basis point cut this month and slashed his 2020 economic growth forecast to 1.8% from 3% to "reflect the impact of the coronavirus on an already-weak economy".

The central bank has said growth this year will be much lower than its current forecast of 2.8%.

In 2019, Southeast Asia's second-largest economy expanded just 2.4%, the weakest in five years due to declining exports amid global trade tensions and sluggish investment.

The Fed led the charge in the global response to the growing economic risk posed by the coronavirus, announcing an emergency interest rate cut on Tuesday to boost confidence.



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