BANGKOK (Reuters) – Thailand’s finance ministry wants to see a cut in interest rates this year to be align with economic fundamentals and will discuss monetary policy easing with the central bank, a deputy finance minister said on Monday.
Paopoom Rojanasakul said the ministry would also discuss with the Bank of Thailand access to car loans as the automotive sector is struggling and weighing down manufacturing.
“We would like to see a reduction in the policy interest rate this year to be more in line with our economic fundamentals and to help the manufacturing sector, which is still a problematic sector this year,” he said.
“This is something we must continue to push for.”
Thailand’s car production fell 17.37% in December from a year earlier, down for the 17th successive month, according to the Federation of Thai Industries. Domestic auto sales in 2024 fell 26.2% annually to the lowest level in 15 years and the FTI said the rejection rate for auto loans reached 70%.
In December, the central bank left its main interest rate at 2.25% after a surprise cut in October. It will next review policy on Feb. 26.
Governor Sethaput Suthiwartnarueput told Reuters on Thursday the current policy interest rate was appropriate, though the central bank was ready to adjust it if things change.
Paopoom also said the central bank must ensure the baht does not overly fluctuate and affect the business sector.
The baht dropped as much as 1.07% against the dollar on Monday as emerging Asian currencies and shares tumbled after U.S. President Donald Trump slapped tariffs on imports from Washington’s three biggest trade partners, stoking fears of a trade war and its impact on the region.
Paopoom said investors should look beyond a Thai stock selloff as the country still has potential and the economy will improve in the future.
The government will introduce more stimulus measures to maintain the current momentum of the economy to help it expand further, Paopoom said.
The government also plans measures to mitigate the impact of Trump’s economic policies but it is still assessing what the effect will be, he said.
Those policies, however, could be a good opportunity for Thailand if it can find ways to increase exports, he added.
(Reporting by Kitiphong Thaichareon and Orathai Sriring; Editing by Martin Petty)
