The Thai financial market has recently experienced a significant shock as the Bank of Thailand unexpectedly announced a rate cut, with subsequent remarks from the central bank governor, Sethaput Suthiwartnarueput, further tightening the nerves of market participants. He clearly stated that although the central bank has made the decision to cut rates, the threshold for future rate cuts will be quite high.

Looking back at last week, the Bank of Thailand decided at its Wednesday meeting to lower the one-day repurchase rate by 0.25 percentage points to 2.25%, with a 5-2 voting result. This decision was unexpected, as the Bank of Thailand has long resisted pressure from the government to cut rates, and this rate cut is the first since May 2020. This unexpected rate cut quickly sparked widespread attention and discussion in the market.

So, what prompted the Bank of Thailand to make this decision? Governor Sethaput Suthiwartnarueput pointed out that a slowdown in credit growth is one of the key factors. A slowdown in credit growth implies a weakening of financing demand from businesses and individuals, which could have a negative impact on economic growth. To stimulate credit demand and promote economic growth, the Bank of Thailand decided to take rate-cutting measures.

However, while rate cuts help reduce financing costs, Governor Sethaput also emphasized that the central bank will consider multiple aspects in its decision-making, including economic growth, inflationary pressures, and financial stability. He revealed that since the interest rates have just been adjusted, the threshold for future rate cuts will be quite high. This means that although the market may anticipate further rate cuts, the central bank will not easily make a decision to cut rates again.

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For the market, this statement from the Bank of Thailand is undoubtedly a "calm injection." After the news of the rate cut spread, the market experienced some fluctuations, and the governor's remarks allowed all market participants to more clearly recognize the central bank's prudence and stability in monetary policy formulation.

In the future, the direction of the Bank of Thailand's monetary policy will continue to be closely watched by the market. Market participants will closely monitor changes in data related to economic growth, inflation, and credit, as well as the central bank's policy trends. With the governor's disclosure that the threshold for further rate cuts is high, all market participants also need to view the future monetary policy direction more rationally, avoiding overinterpretation and blind following.

In summary, after the unexpected rate cut by the Bank of Thailand, the governor's statement that the threshold for further rate cuts is high has injected a "calm injection" into the market. In the future, all market participants need to view the direction of monetary policy more rationally and make wise investment decisions.