Thai Finance Minister Advocates for Further Interest Rate Reduction

BANGKOK: Thailand's Finance Minister, Pichai Chunhavajira, expressed his desire for a further interest rate cut to align with the current low inflation during a public statement on Monday. This comes ahead of a policy review by the Bank of Thailand this week, where economists anticipate no change to the key rate.

Minister Pichai emphasized that while the central bank holds the authority to make rate decisions, he has engaged in discussions on the matter with Governor Sethaput Suthiwartnarueput. "From our perspective, if it can be reduced, it's beneficial. We aim to align it with inflation," Pichai stated. He added, "We've already discussed with the governor multiple times... the governor is well-informed about our concerns and global trends."

Average headline inflation for the January-November period was recorded at just 0.32 percent, significantly below the central bank's target range of 1 percent to 3 percent. Despite this, most economists predict the central bank will maintain its benchmark one-day repurchase rate at 2.25 percent during Wednesday's meeting. Only two out of thirty economists in a recent Reuters poll forecast a 25 basis point cut.

In its previous meeting in October, the central bank unexpectedly reduced the key rate by a quarter point but clarified it was not the start of an easing cycle. Minister Pichai also mentioned that the government is still planning measures to boost spending but is not in a rush to implement them. "We're considering New Year's gift and various measures. However, the gift does not necessarily have to be given on December 31," he told reporters.