Thailand further cuts basic interest rate to help economy

The Bank of Thailand (BoT) has further cut its basic interest rate by 25 percentage point to the record low of 0.75 percent in an effort to buffer impact on the economy.

This marks the fourth cut since August last year, approved during a special working session of the Monetary Policy Committee (MPC) on March 20.

In a statement, the bank affirmed the cut will also ease the burden for borrowers who are affected by the COVID-19 and the tension on liquidity in the financial market. The MPC viewed that the pandemic will become more severe in the immediate future than previously predicted and it will take time for the situation to normalise, which will have a strong impact on the Thai economy.

The MPC is scheduled to have a policy meeting on March 25 and issue update forecasts on the economy.

Thailand is described as one of the economies most vulnerable to COVID-19 as its main sources of revenue from trade with and tourism from China are affected. Foreign tourism occupies up to 11 percent of Thailand’s 2019 GDP. Last year, the country welcomed a record 39.8 million foreign tourist arrivals, with those from China spending about 18 billion USD, or one-third of the total spending by foreign tourists in Thailand.