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Lower U.S. interest rates to help Thai economic recovery.

BANGKOK, Jan. 4 Kyodo

The U.S. interest rate cut announced Wednesday is likely to be good news for Thai economy in terms of exports, capital outflow, the stock market and currency, the Thai Farmer Research Center (TFRC) said in a report Thursday.

The report said the U.S. interest rate cut could reduce the risk of recession in the U.S. economy, which could help Thailand's exports.

The lower U.S. rates could also reduce the net capital outflows as Thai investors could hold back accelerating debt payments, which would support Thailand to continue its low-interest policy in 2001, the report said.

And with more stability in U.S. stock markets, the Thai stock market could benefit, although the political uncertainty at home is still the major factor in the Thai market, it said.

The research center also said the lower U.S. rates could help stabilize the baht, possibly helping it hold above 44 baht to the dollar even if there is further political instability after Saturday's general election.

The U.S. Federal Reserve lowered key short-term interest rates by a 0.5 percentage point Wednesday.
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Publication:Asian Economic News
Date:Jan 8, 2001
Words:188
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