(Bloomberg) -- Thailand’s Finance Minister Pichai Chunhavajira made a fresh appeal for a rate cut on Tuesday, a day before a central bank monetary policy meeting in which it’s forecast to hold borrowing costs at a decade high.
The “timing is right” for the Bank of Thailand to ease borrowing costs to help the economy, Pichai told reporters after a weekly meeting of the cabinet in Bangkok on Tuesday. A lower rate will help the country better manage capital flows and stem a rally in the baht, he said.
The minister said the final authority on monetary policy rests with the rate panel and it should take into account all factors such as low inflation while making the decision.
The Monetary Policy Committee headed by BOT Governor Sethaput Suthiwartnarueput is set to defy the government’s rate cut calls once again and keep its benchmark interest rate unchanged at 2.5%, the highest level since 2013, according to 22 of 27 economists surveyed by Bloomberg. Five predict a quarter of a percentage point cut.
Prime Minister Paetongtarn Shinawatra’s administration has piled pressure on Sethaput to lower interest rates and support its fiscal efforts to bolster growth that’s lagged its peers in the region. The rate-panel has held the rate unchanged for five straight meetings after hiking it to a decade-high in the fourth quarter of 2023.
“We want to see faster growth as our growth has been subdued for a long time,” Pichai said. “There is a chance for a rate cut and the timing is right and in line with the state of the economy which we want to boost.’
The government has waged a public campaign for easier monetary policy and is pushing to raise the 2025 inflation target from a 1% to 3% range to 1.5% to 3.5%, adding pressure on the central bank to cut interest rates, people familiar have said.
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