Thailand’s central bank cut interest rates last month in response to a worsening economic outlook and growing global trade tensions, according to minutes released Wednesday from the Bank of Thailand’s (BOT) April 30 policy meeting.
The BOT’s Monetary Policy Committee voted 5-2 to reduce the one-day repurchase rate by 25 basis points to 1.75%, the lowest level in two years. The bank also downgraded its forecasts for both economic growth and inflation.
“Most members deemed it appropriate to cut the policy rate at this meeting,” the minutes stated. The rate cut was intended to support the weakening economy, respond to increasing downside risks, and keep financial conditions in line with economic trends.
This was the second rate cut this year. The previous cut occurred in February. The next policy review is scheduled for June 25.
The BOT warned that the economy was likely to grow more slowly than expected. Rising global trade tensions, particularly those linked to U.S. tariffs, were cited as a major concern. The committee stressed that future monetary policy should depend on the evolving economic outlook.
There was also concern over the quality of consumer loans, especially in the housing sector.
Tourism, a key part of Thailand’s economy, remains below pre-pandemic levels. The BOT expects foreign tourist numbers to stay under 40 million annually for at least the next one to two years.
In addition, ongoing trade uncertainty is expected to hurt private investment. The bank also noted that the Thai baht had been unstable and out of line with the country’s economic fundamentals. This volatility could harm the competitiveness and flexibility of Thai businesses.
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