The 5:2 vote by the Thai central bank’s Monetary Policy Committee (MPC) to hold the key policy rate at 2.50 per cent is a hint of an impending rate cut at their next meeting, according to some economists.
The MPC decision in January disappointed Prime Minister Srettha Thavisin and his aides who had been forcefully arguing for the rate cut.
Srettha, who is also finance minister, said that he could not interfere with the Bank of Thailand (BOT)’s independence.
Two of the MPC members voted for a rate cut because inflation has been negative and economic growth has slowed down.
The majority of MPC members, however, cited many reasons for leaving the rate unchanged. They argued that though headline inflation was in negative territory for four consecutive months, core inflation remained positive. They also said that they wanted to guard financial stability as a lower rate could…
