Thai central bank says policy should take a medium-term view

The Bank of Thailand said it will take a medium-term view of monetary policy after cutting its benchmark rate by a cumulative 125 basis points to 1.25%; the next Monetary Policy Committee meeting is scheduled for Feb. 25.

The Bank of Thailand said on Wednesday that monetary policy will be conducted with a medium-term perspective to guard against unforeseen risks and to preserve limited room for further easing. The central bank has cut its benchmark rate by a cumulative 125 basis points since October 2024. The one-day repurchase rate stands at 1.25% after the most recent cut. Officials noted that adjusting the policy rate alone is not sufficient to address localized financial tightening or structural economic problems. Key points: - The Bank of Thailand emphasized a medium-term perspective for conducting monetary policy. - The benchmark rate has been eased by 125 basis points since October 2024 and is now 1.25%. - Deputy Governor Piti Disyatat said policy space is limited and the ability of interest-rate cuts to boost demand is constrained. - The next Monetary Policy Committee meeting is scheduled for Feb. 25, and officials signaled lower odds of further cuts unless domestic conditions worsen or deflation risks rise. Summary: The Bank of Thailand's medium-term stance reduces near-term expectations of additional easing while keeping limited space to respond to shocks. The central bank has lowered its growth outlook for the year to 1.5% and will reconvene on Feb. 25 to reassess conditions.