An impact on Thail Economy after the Fed reduce the interest rate for the first time in years

The 0.5% cut in interest rate by the Federal Reserve (Fed) last week was the first rate cut in four years. This decision was made amid lower inflationary pressure and a stronger US economy, affecting both at home and internationally, especially in Thailand.

Positive Impact

The Inflow of Funds: The interest rate cut by the Fed has made investments in USD assets less attractive. Investors may shift to emerging markets such as stock and bond markets in Thailand, thus increasing liquidity and boosting private investment.
Lower Borrowing Costs: The Fed’s rate cut is likely to cut interest rates in Thailand along with lower borrowing costs for businesses and the general public, especially small and medium-sized enterprises that have difficulty accessing funding sources during high interest rates.
An Increase in Exports: Lower interest rates in the US may weaken the US Dollar, causing the Baht to depreciate accordingly, which will make Thai goods cheaper in the world market, thus increasing competitiveness and boosting exports.

Negative Impact

Fluctuations in the Money Market: The Fed’s rate cut may lead to uncertainty in global money markets. If investors are concerned about the US economic stability, it may cause volatility in the money and capital markets in Thailand.
Pressure on the Exchange Rate: If capital inflows become excessive, the Baht may appreciate rapidly and affect the export sector, especially export-dependent businesses.
A Higher Inflation: The Thai economic recovery may be a result of increased investment, but large capital inflows may lead to inflation, which will force the Bank of Thailand to raise interest rates to control.

An In-Dept Analysis

The interest rate cut by the Fed not only affects the US economy but also the global economy, including Thailand. While capital inflows can stimulate growth and create new economic opportunities, risks such as volatility in the money and foreign exchange markets may affect exports.

The interest rate cut by the Fed was in response to slowing inflation and stimulating the U.S. economy. For Thailand, both positive and negative impacts require appropriate planning and strategies to deal with changes, especially in finance and investment for the Thai economy to grow steadily in the future.

References from
thestandard / bangkokbiznews / amarintv