Thailand cuts rate in latest move to blunt impact of virus

Thailand's central bank cut its benchmark interest rate to an all-time low of 1 per cent from 1.25 per cent on Wednesday to help the economy weather a series of setbacks, most lately the virus outbreak in China that has devastated Thailand's tourism sector.

Thailand is among many of China's neighbours confronted with plunging tourist arrivals and other adverse impacts from the outbreak that has spread from the central Chinese city of Wuhan to more than 20 countries.

Governments and central banks have indicated they're prepared to act to prevent the outbreak from throwing regional economies into chaos.

The Bank of Thailand said the softer credit policy would help businesses and households cope as risks rise from mounting debt.

A severe drought and uncertainties brought on by the trade war between China and the US are also casting a shadow over the outlook for one of Southeast Asia's biggest economies.

"The Thai economy would expand at a slower rate in 2020 than previously forecasted and much further below its potential due to the impact of the outbreak of coronavirus," a delay in enacting the annual budget and the drought, the central bank said in a statement.

"Exports of goods would decline in line with trading partner economies and potential impacts of regional supply chain disruptions," it said.

Analysts are predicting that the central bank will cut the benchmark rate by another 0.25 percentage point, perhaps as soon as March.

Singapore, the Philippines and Indonesia are among other countries that have signaled a readiness to adjust policies if need be.

The Monetary Authority of Singapore said Wednesday that it had sufficient room" to ease the exchange rate in line with the weakening of economic conditions as a result of the outbreak."