Thai interest rates cut to 3.5%

BBC News
Last Updated: Wednesday, 23 May 2007, 11:44 GMT 12:44 UK

Electronic trading Bangkok
Both business and consumer confidence in Thailand has been hit

Thailand’s central bank has cut interest rates to
3.5% to help lift consumer spending hit by the country’s ongoing
political instability.

The half a percentage point reduction marks the fourth time the Bank of Thailand has lowered rates this year.

Its move comes after both consumer and business
confidence were hit by last September’s military coup, and by bomb
attacks in Bangkok on New Year’s Eve.

Business leaders have called for the Bank to lower rates still further.

“The pace of the rate cut was slow although it was
better than nothing,” said Pornsilp Pacharintanakul, secretary general
of the Board of Trade business group.

No responsibility

Thai consumer confidence fell to a five-year low in
April, while the central bank has reduced its economic growth forecast
for this year to between 3.8% and 4.8%.

No person or group has claimed responsibility for the Bangkok bomb attacks, which killed three people.

Some commentators have said they were likely connected to the ongoing Muslim insurgency in the far south of Thailand.

While Thailand is a predominantly Buddhist country,
militants based along its border with Malaysia want their own
independent state.

Yet other analysts have speculated whether the Bangkok
bombs were organised by persons loyal to the former civilian government
that the military coup ousted.

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