Finance Ministry Says BoT Should Reconsider Monetary Policy Stance

The Finance Ministry said that the Bank of Thailand (BoT) should assess space for a rate cut and reconsider monetary easing as it has no reason not to lower the key interest rate. Prime Minister Srettha Thavisin repeatedly called on the BoT to cut rates and stimulate the economy, but his requests have so far fallen flat.

• The Finance Ministry said that monetary easing wouldn't exacerbate household debt as domestic banks are not expected to cut loan rates in reaction to a reduction in the BoT's policy rate. Meanwhile, high interest rates affect the production costs and competitiveness of Thai firms.
• The BoT appeared to have softened its stance, with Assistant Governor Piti Disyatat noting overnight that the central bank will weigh the need to adjust its neutral interest-rate stance at next month's meeting - although "it's hard to prejudge the decision right now" and any move would be nothing more than a one-off "recalibration."