BANGKOK : Thailand’s Finance Minister Pichai Chunhavajira on Wednesday pushed the government’s case for a cut in key interest rates ahead of a meeting with the central bank where the inflation target and the strong baht will be on the agenda.
The meeting, first reported by Reuters, follows months of government pressure on the Bank of Thailand to cut interest rates to boost the growth of an economy that has been struggling since the pandemic.
“Discussing the inflation target range will help align monetary and fiscal policies,” Pichai said, adding high rates worked against the government’s stimulus programme.
The 1 per cent to 3 per cent inflation target range has been in place since 2020. Inflation has been below that range this year, and Pichai said a review could raise the chance of a rate cut.
In August, the central bank held key rates at 2.50 per cent for a fifth straight meeting. The central bank has said the policy rate is at a neutral level and is not high by global standards. The next rate review is on Oct 16.
The strength of the baht, which has hit 30-month highs against the dollar, was affecting exporters and would also be discussed at the meeting, Pichai said.
Separately on Wednesday, the government launched the first phase of its 450 billion baht ($13.8 billion) stimulus handout scheme which it hopes will lift growth,
Thailand is expected to grow 2.6 per cent this year after expanding 1.9 per cent last year, which lagged regional peers.
($1 = 32.6400 baht)