BANGKOK (Reuters) – Thailand’s worsening economic outlook as U.S. tariffs intensified global trade tensions triggered a cut in interest rates last month, minutes of the Bank of Thailand’s April 30 monetary policy meeting showed on Wednesday.
At the meeting, the BOT’s monetary policy committee voted 5-2 to cut the one-day repurchase rate by 25 basis points to 1.75%, the lowest level in two years, and lowered its growth and inflation forecasts.
“Most members deemed it appropriate to cut the policy rate at this meeting to be consistent with the worsening economic outlook, address heightened downside risks, and align financial conditions with the evolving economic and inflation outlook,” the minutes said.
The BOT had also cut interest rates at its previous meeting in February. The central bank’s next rate review is on June 25.
In the minutes, the central bank said the economy was likely to grow at a slower pace than previously anticipated, with heightened risks stemming from global trade tensions that had intensified more than expected. The committee saw the need for monetary policy to be outlook-dependent and voiced worries about the quality of retail loans, particularly housing loans, the minutes showed.
The BOT said foreign tourist arrivals might not return to the pre-pandemic level of 40 million in the next one to two years, and trade uncertainty would hit private investment.The committee said the Thai baht had been volatile and was not aligned with economic fundamentals, which could undermine the competitiveness and adaptability of businesses.
Headline inflation was projected to remain below the target range of 1% to 3% in 2025 and 2026, and financial conditions would remain tight, the minutes said.
(Reporting by Orathai Sriring, Thanadech Staporncharnchai and Chayut Setboonsarng; Editing by John Mair)
