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Thai central bank seen cutting key rate as unrest persists

Published on Jan 21, 2014 2:06 PM

BANGKOK (Reuters) - Three months ago, worries about Thai political strife prompted the country's central bank to surprisingly cut its benchmark interest rate, and now it is expected to do the same thing, for the same reason, on Wednesday.

Ten of 17 economists polled by Reuters expect the Bank of Thailand (BOT)'s monetary policy committee to cut the 2.25 per cent one-day repurchase rate to help the economy cope with political unrest.

Seven forecast no change, saying the current rate already supports growth and a further easing could spur more capital outflows and stoke inflation.

When the committee last met on Nov 27, anti-government protests had just begun and nearly all analysts assumed the rate would be left unchanged. But citing how the unrest was denting confidence - and could hurt growth by reducing consumption and delaying public spending - it cut the rate 25 basis points to 2.25 per cent.

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