The Bank of Thailand (BOT) cut its benchmark interest rate to a record low at an emergency meeting amid worries about corona virus, it has damaged the tourism industry sector of this country and increased the risk of recession.
In the announcement on the website at the end of Friday, the Bank of Thailand said the bank’s monetary policy committee voted unanimously to cut the policy rate to 0.75%, effective March 23.
This is the second interest rate cut in many months after this bank also lowered the interest rate by 0.25% in February.
The Monetary Policy Committee viewed that the COVID-19 outbreak in the period ahead would be more severe than previously expected and the situation would take some time before returning to normal.
“This problem will seriously affect the economy of Thailand,” BOT said in the announcement. “Moreover, the epidemic has caused worries in global financial markets, affecting the liquidity and the operation of financial markets in Thailand despite the general stability of the financial system.”
According to the Monetary Policy Committee of Thailand, cutting borrowing costs will assist borrowers who affected by the disease and it eases liquidity tensions in financial markets.
BOT said it would ensure adequate liquidity as well as the normal operation and stability of financial markets.
It is expected that the Thai Monetary Policy Committee will continue to meet on March 25.
BOT said they will ensure adequate liquidity as well as the normal operation and the stability of financial markets.
It is expected that the Monetary Policy Committee of Thailand will continue to meet on March 25.
BOT is the latest central bank in Southeast Asia that loosened the policy after the central bank of the Philippines and Indonesia lowered interest rates by 0.5% and 0.25% respectively on Thursday. Meanwhile, the central bank of Malaysia loosened compulsory reserve regulations.
In other countries in Asia – Pacific, the Central Bank of Australia (RBA) also lowered the basic interest rate and has started the quantitative easing program.