Thailand's Finance Minister has indicated that the country's low inflation provides room for interest rate cuts to stimulate economic growth and support exports by weakening the Thai baht. The Bank of Thailand is set to announce its interest rate decision soon. Among 26 economists surveyed, 16 predict the central bank will maintain the key rate at 2.25%.
The Finance Minister emphasized that lowering rates could help sustain economic momentum, given the persistently low inflation. Thailand's inflation rate stood at 1.32% in January, averaging 0.4% last year, significantly below the central bank’s target range of 1% to 3%.
He also committed to taking further measures to address the country's household debt issues and urged banks to increase lending. He called for more flexibility from the central bank in loan-to-value ratio rules to support the real estate sector.
For export-driven Thailand, a weaker baht is crucial, he noted, as all exporting countries prefer a weaker currency. The baht has appreciated by 2.5% against the dollar since the beginning of the year. Discussions with the central bank have covered inflation, household debt, lending, the baht, and interest rates.
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