Thai central bank cut policy rate to help curb baht rise

July 21, 2007 - 0:0

BANGKOK (Xinhua) -- Thailand's central bank further cut policy interest rate by 25 basis points to 3.25 percent in a mild attempt to curb baht appreciation.

Monetary Policy Committee of the Bank of Thailand (BOT) announced the cut after a scheduled meeting Wednesday, after some of the country's prominent economists suggested the BOT to make the move. However, the announced rate cut is much lower than 100-150 basis points as suggested. The central bank has earlier shown reluctance in further reducing the policy rate, which has been cut for several times, by 150 basis points in total, so far this year. Suchada Kirakul, BOT's Assistant Governor, said that the Monetary Policy Committee believes there are still risks affecting growth, while inflation rate in the first half of this year remains low, according to a report by news network The Nation. She said the central bank has already submitted a package of measures to stem baht appreciation and support outflows to the Finance Ministry, but she did not reveal the details. Meanwhile, Thai Prime Minister Surayud Chulanont said Wednesday that the government has prepared measures to prevent the baht from appreciating to the level of 30 baht per dollar as earlier predicted by some economists. The premier said he saw no need to elevate the baht appreciation as a national agenda as some groups suggested, because the government agencies are capable of handling the problem. The baht last week hit a fresh 10-year high of 33.18 baht against the U.S. dollar, rising from around 36 baht per dollar at the end of 2006