The Bank of Thailand cut its policy interest rate by 25 basis points to 2.25% on 16 October 2024, in a decision that the Monetary Policy Committee passed by a 5–2 vote. It was the first rate reduction in the country since 2020 and came after the central bank had repeatedly resisted calls — including sustained pressure from the Thai government — to ease monetary conditions in support of the economy.
The majority said a neutral policy stance remained appropriate and that a lower rate would help alleviate the debt-servicing burden for borrowers without impeding household debt deleveraging.
GROWTH AND HOUSEHOLD DEBT
The Bank of Thailand's own projections put GDP growth at 2.7% for 2024 and 2.9% for 2025.
Household financial conditions were a further concern emphasised by the MPC. The central bank cited the slower income recovery and elevated debt burden of vulnerable households. Inflation, by contrast, was assessed as subdued.
The two dissenting members, who preferred to hold the rate at 2.50%, argued that it was consistent with the economic and inflation outlook and helped preserve long-term macro-financial stability and policy space amid ongoing uncertainties.
GOVERNMENT PRESSURE
The rate cut arrives after a prolonged period during which Thailand's government publicly urged the Bank of Thailand to lower borrowing costs to stimulate the economy.