Mr. Paiboon Kittisrikangwan, Assistant Governor, Bank of Thailand annouces the outcome of the MPC meeting today, as follows. The committee judges that the Thai economy should continue to expand on the back of sound economic fundamentals, although downside risks have increased from lower-than-expected growth in the first quarter of this year. As inflation remains well within the target, monetary policy has room to further cushion against downside risks to domestic demand. Against the backdrop of continued financial stability concerns, the MPC thus voted unanimously to reduce the policy rate by 0.25 percent from 2.75 to 2.50 percent per annum, with immediate effect. The MPC will closely monitor developments of the Thai economy, financial stability risks as well as capital flow situation, and stand ready to take appropriate action as warranted.

The Monetary Policy Report is prepared quarterly by staff of the Bank of Thailand with the approval of the Monetary Policy Committee (MPC). It serves two purposes: (1) to communicate to the public the MPC's consideration and rationales for the conduct of monetary policy, and (2) to present the latest set of economic and inflation forecasts, based on which the monetary policy decisions were made.

The MPC considers that an inflation target for core inflation of 0.5 - 3.0 per cent is appropriate for the Thai economy. This target provides sufficient flexibility for economic growth, and at the same time will help cushion temporary economic shocks, minimizing the need for the MPC to adjust monetary policy frequently, thereby reducing short-term interest rate volatility and promoting financial stability. (click to read more)

The Thai baht effective exchange rate takes into account a basket of currencies of important trading partners and competitors - and not just the US Dollar. (click to read more)

The Monetary Policy Committee, or the MPC, is responsible for monetary policy decisions. (click to read more)