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Asia, Forex

Thai unexpectedly cuts key rate, worried by baht strength

BANGKOK, Aug 7 (Reuters) – Thailand’s central bank on Wednesday unexpectedly cut its benchmark interest rate for the first time since 2015, which should support faltering growth and weaken the strong baht.

The Bank of Thailand (BOT)’s monetary policy committee (MPC) voted 5-2 to cut the one-day repurchase rate by 25 basis points to 1.50% – the level before it was hiked by the same amount in December, the first tightening since 2011.

The two dissenters faovered a hold.

The committee said it was worried about strength of the baht .

In a Reuters poll, 14 out of 15 economists had predicted no change to policy while the other forecast a quarter-point cut.

The baht is Asia’s best performing currency this year, appreciating about 6% against the dollar. (Reporting by Orathai Sriring and Kitiphong Thaichareon Editing by Richard Borsuk)

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