BANGKOK (Reuters) -Thailand’s central bank lowered its key interest rate by a quarter point on Wednesday, its fourth cut in 10 months as it looks to support a sluggish economy grappling with negative inflation and the impact of U.S. tariffs.
The Bank of Thailand’s monetary policy committee unanimously voted to reduce the one-day repurchase rate by 25 basis points to 1.50%, the lowest in more than two years.
The BOT had held the key rate at its June meeting following back-to-back cuts at reviews in February and April. It had also cut rates in October last year.
Twenty-three of 28 economists in a Reuters poll had predicted a quarter-point reduction this week. The other five had expected no rate change.
The central bank in a statement said the Thai economy was expected to expand this year and next close to earlier assessments, but U.S. trade policies would exacerbate structural problems and weaken competitiveness, with small businesses vulnerable.
“The committee views that monetary policy should be accommodative going forward to support the economy,” the statement said.
It expects growth in Southeast Asia’s second-largest economy to slow in the second half of the year, it said.
The baht reversed course to fall 0.1% after the announcement, while Thai stocks were largely unchanged.
The economy has struggled with weak consumption, high household debt, slowing tourism, trade uncertainty and U.S. tariffs.
The central bank has said the economy might have grown about 3% annually in the second quarter of 2025 but would feel the impact of U.S. tariffs and weakening consumption later this year.
Wednesday’s meeting was the last for Governor Sethaput Suthiwartnarueput. New Governor Vitai Ratanakorn will take over on October 1, and he has said rate cuts will support growth.
The next policy review will be on October 8.
In June, the BOT predicted 2025 economic growth of 2.3%, with export growth of 4%, after factoring in U.S. tariff rates of 18%. The economy expanded 2.5% last year, lagging peers.
Last month, the United States reduced its tariff rate to 19% on imported goods from Thailand, down from the initial 36% level and more aligned with other countries in the region. There are still uncertainties relating to U.S. tariffs on transshipments via Thailand from third countries.
(Reporting by Orathai Sriring, Kitiphong Thaichareon, Thanadech Staporncharnchai, Chayut Setboonsarng; Editing by Martin Petty)
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