Bank of Thailand faces new rate cut calls

Bank of Thailand faces new rate cut calls

The government has again urged the Bank of Thailand (BoT) to consider revising its interest rate policy and lowering the benchmark interest rate for the sake of economic stimulus.

The rate cut plea was made yesterday by Thitiwat Adisornphankul, deputy secretary-general to Prime Minister and Finance Minister Srettha Thavisin.

Since Thailand has been dealing with the economic impacts of the Covid-19 pandemic, the central bank has raised its main policy rate on eight occasions, from 0.50% up to the current 2.50%, said Mr Thitiwat, echoing Mr Srettha's pro-rate cut stance.

Thailand's Consumer Price Index (CPI) dropped to 106.98 in January from 108.18 in January last year, while the country's headline year-on-year inflation stayed in negative territory for the fourth straight month in January at minus 1.1%, the lowest in 35 months, said Mr Thitiwat.

The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

The decreased inflation reflects the declining purchasing power of consumers and impacts the Consumer Confidence Index (CCI) which has dropped from 54.8 in December last year to 54.5 in January this year, said Mr Thitiwat.

A policy rate that is more suitable for the actual economic situation of Thailand is crucial for facilitating the country's economic stimulus efforts, he said.

BoT Governor Sethaput Suthiwartnarueput rejected the government's previous call for urgent talks about the central bank's rate policy.

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