 Investor confidence in Thailand has been undermined |
Thailand has cut its key interest rate to 4.75% to boost economic growth and confidence in the country. The decision by the Bank of Thailand to lower the rate from 4.94% is the first cut in six months, and comes amid lower domestic demand and falling inflation.
Investor confidence in Thailand has been undermined since a military coup last September and a wave of bombings.
A recent proposal to tighten foreign ownership rules has been a further cause for concern for investors.
The bank's assistant governor Suchada Kirakul said: "We decided to cut the rate after our latest figures showed that domestic consumption has declined while inflationary pressure has declined."
"The rate cut will help stimulate the economy in the longer-term and as well decrease pressure on the [Thai] baht," she said.
There had been mixed views from analysts over whether Thailand would cut rates.
Vishnu Varathan, an economist at Forecast in Singapore said the move looked like "an attempt to compensate for foreign investors leaving" adding that the Bank of Thailand is "trying to bring down borrowing costs for the local economy".
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The rate cut will help stimulate the economy in the longer-term
