BOT cuts key interest rate to 2.25%

BANGKOK, November 27 (TNA) - The Bank of Thailand (BOT) has reduced its key interest rate, the repurchase rate, by 0.25 per cent to 2.25 per cent, with immediate effect. BOT Assistant Governor Paiboon Kittisrikangwan, who oversees the central bank's financial policy, told reporters on Wednesday that the decision was made at the latest meeting of the BOT's Monetary Policy Committee (MPC) earlier in the day in a bid to spur the national economic growth. Paiboon said that the new cut in the policy interest rate is believed to have an effect on Thailand's short-term interest rate and property prices, as well as on the domestic bond market. Paiboon acknowledged that the MPC's decision, with the majority vote of 6:1, followed lower than projection of Thailand's economic growth in the third quarter of this year due to a slowdown in domestic consumption, the government's spending and Thai exports. According to the BOT assistant governor, the MPC has also lowered its projection on Thailand’s gross domestic product (GDP) growth this year to 3 per cent, from 3.7 per cent, due partly to a delay in the government's new mega-investment, but the revised GDP growth projection in 2013 has not yet included impacts from the ongoing domestic political turmoil, which could affect the Thai economy in the short-term. The BOT assistant noted that the MPC, meanwhile, believes the Thai economy in 2014 could improve, thanks to the recovering world economy and the government's new mega-investment, although it is expected to expand by 4 per cent year-on-year, lower than its earlier projection of 4.8. (TNA)