MPC cuts policy rate by 50bps

The cut came two days after the National Economic and Social Development Board reported that Thai economy contracted over 4 per cent in the last quarter of last year. Meanwhile, exports in January also contracted 26.5 per cent on year.

Since December, the MPC has cut the rate which stood at 3.75 per cent in October four times: 1 percentage point in December, 75 basis points and another 50 basis points in January.

Ekniti Nitithanprapas, a macroeconomic specialist of the Fiscal Policy Office, on Tuesday expected the MPC to cut the policy rate as much as 0.75-1 percentage point at their meeting today.

 He said that as the economy worsens than expected, a strong medicine is necessary.

 Standard Chartered Bank (Thai) economist Usara Wilaipich expected the rate to be cut at least 50 basis points. She supported the forecast with the 26.5 per cent export contraction in January as the main reason as well as the likelihood that Asian economy would remain sluggish at least in the next two quarters.