Bank of Thailand cuts key interest rate by 0.25%

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BANGKOK, Oct 17 – The Bank of Thailand (BoT) cut its benchmark interest rate by 0.25 per cent to stimulate Thailand’s 2013 economy.

BoT’s Monetary Policy Committee (MPC) secretary Paiboon Kittisrikangwan said the panel voted 5 to 2 to cut the policy interest rate from 3 per cent to 2.75 per cent per annum, effective immediately.

The Thai economy continued to expand in the third quarter, although the impact of a softer global demand for exports and on export production had become more apparent, the BoT said in its statement.

The MPC assessed that the global economy would gradually improve next year, but the substantial degree of uncertainty surrounding the outlook could hamper exports in the period ahead.

Domestic spending and private investment outlays continued to be robust, though investment moderated as flood-related expenditures tapered off. Credit growth to the private sector remained high and warranted close monitoring, while inflationary pressure stabilised at an acceptable level.

The statement said with upside risk to inflation contained, the majority of MPC members deemed that the easing of monetary policy was warranted to shore up domestic demand in the period ahead and to ward off the potential negative impact from the global economy, which remained weak and fragile.