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Thai central bank slashes interest rate
(Agencies)
Updated: 2008-12-03 17:14
BANGKOK, Thailand  - Thailand's central bank slashed interest rates by the largest amount in eight years, attempting to stave off recession as the economy reels from the global downturn and a weeklong shutdown of Bangkok's airports by anti-government protesters.

The Bank of Thailand said Wednesday it had cut the key lending rate by 1 percentage point to 2.75 percent, its lowest level since mid-2005.

"Domestic political problems are likely to have greater repercussions on economic growth than previously assessed, particularly to confidence and tourism," assistant governor Duangmanee Vongpradhip said in a statement.

Protesters were ending their occupation of the Thai capital's international and domestic airports Wednesday but the damage to the nation's vital tourism industry was expected to be long-lasting, with more than 300,000 travelers stranded by the airport chaos.

A court on Tuesday dissolved the ruling party for vote buying, forcing Prime Minister Somchai Wongsawat and other top government ministers out of office - meeting a key demand of the protesters.

The central bank said the global financial crisis has led to a significant and worse-than-expected slowdown in the industrialized economies, which will hurt Thailand's exports, a mainstay of economic growth.