MPC member: Lower rates won't help virus-hit economy muchAn area outside the Terminal 21 shopping arcade in Asoke is quiet after Bangkok is under lockdown. (Photo: Varuth Hirunyatheb)Interest rates have become less effective managing the flagging economy, with financial measures and fiscal policy currently better tools, a member of the Monetary Policy Committee (MPC) said, playing down the prospect of rate cuts. Strict curbs to contain the Southeast Asian nation's biggest Covid-19 outbreak have battered economic activity and the still struggling tourism sector. "Cutting (the policy rate) to zero from 0.50% or from 0.25% to zero, the benefits are not much as we know it's already low and liquidity is not a problem," he told Reuters. A zero percent rate would also see legal limitations and could overly impact financial institutions, Mr Somchai said.

Source: Bangkok Post August 19, 2021 05:26 UTC