2025-02-25
Bank of Thailand is expected at its next interest rate meeting on February 26 2025 lower the key interest rate by 0,25 percentage points to 2%The decision follows a period of low economic growth, declining exports and global uncertainty. Analysts say a lower interest rate could help stabilize the economy and strengthen competitiveness.
Why might the interest rate be lowered?
The Thai economy grew only 2,5% in 2024, which was lower than expected. Several factors have contributed to this development:
- High interest rates globally: Reduced lending and investments.
- Weak exports: Thai products have been affected by the global economic slowdown.
- Uncertainty around tourism: The recovery of tourism has been slower than expected, which is affecting the country's economy.
By lowering interest rates, the central bank hopes to:
- Making it cheaper to borrow for households and businesses.
- Stimulate investment and consumption.
- Counteract the economic slowdown.
What does an interest rate cut mean for Thailand?
If the interest rate is lowered, it could lead to:
- Weakened Thai baht, which may benefit exports but impair imports.
- Lower costs for loans, which can increase investments in real estate and business.
- Higher inflation, if more money moves in the economy.
What do the experts say?
Amantep Chawala, head of research at CIMB Thai Bank, believes that a cut “could help Thailand maintain economic stability in an uncertain global environment.” However, he emphasizes that the central bank must balance the need for growth against the risk of increased inflation.
What happens next?
The decision on the interest rate is expected to be official on February 26 2025We will follow up on developments and analyze how the market reacts to the decision.
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Text: The editorial staff
Image license: sergeitokmakov, Pixabay, original image