Thai rates should move in same direction as global rates, official says

THAILAND’S interest rates should follow the downward trend in global rates, a deputy finance minister said on Thursday (Sep 19), a day after both the US Federal Reserve and Bank Indonesia eased policy.

The central bank had to coordinate with the finance ministry so that monetary and fiscal policies worked in tandem to spark activity, Paopoom Rojanasakul told reporters, saying while there was signs the economy was improving, inflation was too low.

“Thailand’s policy interest rate must be consistent and appropriate with the global economic situation and the direction of global interest rates,” he said.

Thailand’s key interest rate has been at a decade-high of 2.5 per cent for a year, and the Bank of Thailand (BOT) has resisted repeated government calls for a cut. The next rate review is on Oct 16.

South-east Asia’s second-largest economy grew at an annual pace of 2.3 per cent in the April-to-June quarter, picking up from 1.6 per cent in the first quarter of the year. The finance ministry predicts growth of 2.7 per cent for 2024, after last year’s 1.9 per cent expansion.

A stronger baht is impacting exports and action must be taken to ensure the currency will not swing too much, Paopoom added. REUTERS