The Bank of Thailand (BoT) has reported there are signs of a real estate market slump as a result of shrinking demand from home buyers and fewer new property launches.
The central bank last week confirmed the recent reduction of the benchmark rate by 0.25 percent has yet to create any substantial effects on capital markets as it was within the expectation of financial institutions.
Commenting on the Monetary Policy Committee’s latest decision to adjust the policy interest rate down to 2 percent, BoT Spokesperson Roong Mallikamas said that the change had already been foreseen by the capital market. Once the adjustment was made, she claimed that commercial banks could react in no time by lowering their interest rates accordingly.
Roong said exchange rates had experienced no fluctuations, while the sales of bonds were still stable. In the meantime, limited impacts were expected from the Fed’s quantitative easing tapering policy as well as the slowdown in Chinese economic growth, thanks to the strong fundamentals of the Thai economy.
As well as noting signs of a real estate slump, the spokesperson added that inflation is also rising from higher prices of food and energy, though in a gradual manner.
She concluded that a relaxed monetary policy was still necessary, and added that further reduction of the benchmark rate was possible.
Andrew Batt, International Group Editor of PropertyGuru Group,
wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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