Kasikorn Research Center says domestic factors prompted benchmark rate reduction

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BANGKOK, 29 November 2013 (NNT) – The political situation has become a significant risk factor to the country’s economy, enough for the Monetary Policy Committee (MPC) to reduce the benchmark interest rate, according to the Kasikorn Research Center. 

Dr. Charl Kengchon, managing director of Kasikorn Research Center, said the MPC’s decision came about after it deemed that risks facing the Thai economy exceeded what had previously been forecast. Risks arising from domestic factors were especially significant. These include the expectation that the government’s budget disbursement might not reach target, and the political risk that may affect investments and consumer spending.

Dr. Charl views that reducing the policy interest rate will not spur public consumption, because the domestic purchasing power has already been declining for a while. However, the move will help reduce the interest burden on those who were indebted.