THAILAND’S central bank surprised markets by cutting its key interest rate for a second straight meeting yesterday, with policymakers under pressure to revive the stumbling economy.

    The Bank of Thailand’s monetary policy committee (MPC) voted 5-2 to cut the one-day repurchase rate by 25 basis points to 1.50 percent, confounding expectations for no change in a poll of economists.

    At the last meeting March 11, the committee also unexpectedly cut the policy rate by 25 basis points, the first rate change in a year, but the vote was a close 4-3.

    “It is rather unexpected and signals desperation and strong disagreement with the official forecasts. A cut strongly suggests very low confidence in growth projections and is rather bold ahead of the U.S. Federal Reserve’s decisions,” said Kobsidthi Silpachai, head of capital markets research, at Kasikornbank in Bangkok.

    The MPC said in a statement that economic growth was weaker than expected and there was a risk consumer prices would fall further. It added that proposed higher government spending would not be able to offset the slide in exports.

    The central bank said it would announce measures on capital movements today.

    The meeting comes as a recent poll showed massive unhappiness with the military-led government’s economic and political performance nearly a year after they seized power.

    The junta seized power in a coup last May to end months of political unrest but has struggled to revive Southeast Asia’s second-largest economy, which grew only 0.7 percent last year. (SD-Agencies)