Thai Government Pushes for Interest Rate Cut to Boost Economy

The deputy finance minister in Thailand has expressed the government’s desire for an interest rate reduction during the central bank’s policy review scheduled for Wednesday.

The minister mentioned that the current interest rate level is deemed “too high” and believes that a cut is necessary to support the economy. The stock market decline, as reflected by the SET Index, is attributed to the country’s challenging economic conditions characterized by diminishing domestic purchasing power and a lack of effective coordination between fiscal and monetary policies, as highlighted by Paopoom Rojanasakul to reporters.

Rojanasakul emphasized that there is a need for better alignment between fiscal and monetary measures to provide a stronger stimulus for economic growth. The government views the 2.50% key interest rate set by the central bank as excessive and detrimental to the economy, advocating for a reduction in the rate.

Despite the government’s stance, the central bank has resisted calls for an interest rate cut and is expected to maintain the key rate during the upcoming policy review.

The finance minister stated that the government’s priority lies in revitalizing the economy rather than addressing the decline in the stock market.

The main stock index has reached its lowest point in nearly three years, dropping below 1,320 for the first time since November 20