Spat Between Thai PM and Central Bank Continues after BOT Keeps Rates Steady

It was in line with expectations that the Thai central bank would maintain its policy rates at 2.50% at the meeting in April, but not what the Thai Prime Minister Srettha Thavisin had hoped for.

Of 26 economists in a Reuters poll, 16 had predicted the BOT would hold the rate steady on Wednesday, while the other 10 had forecast a quarter-point cut.


The Bank of Thailand states in a press conference that the majority of the Committee deems that the current policy interest rate is conducive to safeguarding macro-financial stability, and that the effectiveness of monetary policy on resolving structural impediments is limited. Most members thus voted to maintain the policy rate at this meeting, but will monitor uncertainties of economic factors going forward.


Despite its reasons, this could be seen as a defiance in the eye of the Thai prime minister that has been ceaselessly urging the central bank to cut interest rates, saying that the economy is in a crisis situation and a rate cut would lift the burden on households. He even urged the central bank to call an urgent meeting to cut rates.

Clearly the Bank of Thailand just flat out ignored the prime minister’s advice as Sethaput Suthiwartnarueput, the Governor of the Bank of Thailand, has always been saying that the economy is not crashing.


Surely, there will be a series of comments by the prime minister after this decision to maintain rates until the next meeting in June that the PM’s wish would finally come true as the consensus is leaning toward one rate cut in June and another cut in August.

However, the PM may have less free time commenting about the policy rates as he could be facing a barrage of criticism from the public about his recent announcement on the THB10,000 digital handout that turnout to be not what many had anticipated.