BANGKOK(NNT) – Due to the lower-than-expected performance of the economy, slowdowns in the export sector affected by trade wars, which pose consequences for domestic employment and consumption, the Monetary Policy Committee have agreed to reduce the policy rate by 0.25 percent to 1.25 percent to help boost the economy.
The Monetary Policy Committee (MPC) has agreed by 5 to 2 votes to lower the country’s policy rate by 0.25 percent, to the lowest rate in recent history. The decision was made due to lower than expected economic growth and a struggling export sector, which affect domestic employment and demand. These factors have prompted the MPC to review and amend economic projections at their December meeting.
The committee says its decision to reduce the policy rate, effective immediately, is a more relaxed monetary policy which will help promote economic expansion and push the inflation rate to reach the target. The committee will be following up on the outcomes of the government’s economic stimulation measures and expenditures, investments in key infrastructure projects and their continued effects on private investments.
Thailand’s export sector is also suffering from an appreciating Thai Baht currency, which is the strongest compared to other currencies in the region. The Bank of Thailand has today announced amendments in capital transfer regulations to allow more outgoing cash flow, relieving pressure on the currency.
The new regulations will be effective tomorrow (8 November 2019). They will allow exporters generating less than 200,000 US dollar per single export permit to deposit their money abroad for an unlimited period, allow individual investors to invest in foreign assets by themselves at up to 200,000 US dollar per year, allow more outgoing international money transfers, except for a few restricted categories, allow transfers for foreign real estate purchases at up to 50 million US dollar per year, waive documentation requirements for international transfers up to 200,000 US dollars per transaction, and allow Thai clients investing in gold with authorized brokers to make purchases using foreign currencies.
