Krungthai bank is anticipating more room to ease monetary policy following a recent decision by the monetary policy committee (mpc) to lower the interest rate to 2.25%:o-income ratio and supporting economic recovery.
According to Thai News Agency, Krungthai COMPASS reported that the MPC’s decision involved a 5 to 2 vote in favor of reducing the policy interest rate by 25 basis points from 2.50% per year to 2.25% per year. This strategic move is intended to alleviate the debt burden and is not expected to impede efforts to decrease the household debt-to-income ratio. Forecasts suggest that the Thai economy will grow by 2.7% and 2.9% in 2024 and 2025, respectively, with general inflation rates likely to be at 0.5% and 1.2% for the same periods.
Krungthai COMPASS also highlighted that there is potential for further cuts in the policy interest rate in the future. This reflects the MPC’s concern over the slowing momentum of economic recovery and the headline inflation rate, which is projected to remain below the
midpoint of the inflation target range. Additionally, uncertainties stemming from the Federal Reserve’s interest rate cuts could impact financial market volatility and slow the domestic economic recovery more than anticipated by the MPC, potentially prompting further easing of monetary policy.