New cut interest rate against strong baht

Thailand's army-backed government wednesdey asked the central bank to cut it’s key interest rate by 25 basis points to 3.25% the fifth consecutive rate cut this year to boost economy.
The bank’s assistant governor Suchada Kirakul said in an interview: “We decided to cut the rate after our latest figures showed that domestic consumption has declined while inflationary pressure has declined”. And she added: “The rate cut will help stimulate the economy in the longer-term and as well decrease pressure on the Thai baht”.
Despite lot of official warnings against the rising baht, the Thai currency has jumped 8% against the dollar since january 2007, following a 13% appreciation last year.
The baht on 11 july hit a fresh 10 years high of 33.18 baht against the U.S. dollar, rising from around 36 baht per dollar of the end of 2006.
At the same time Thai Prime Minister Surayud Chulanont said wednesday that the government has prepared measures to prevent the baht from appreciating to the level of 30 baht per dollar as earlier predicted by some economists.
The finance minister, Chalongphob Sussangkarn declared: “Boosting demand for the dollar will help reduce the BoT's burden to buy the dollar” then he said: We are hoping to create a flexible system to manage currency fluctuations in order to react fast to not only huge capital inflows but also possible outflows in the future”.
Another minister announced : “It's time for the central bank and the government to choose between inflation and the fact that more factories are being closed down due to falling export competitiveness amid the strong bath”.
However the Bank of Thailand governor Tarisa Watanagase declared on friday : “even though the Fiscal Policy Committee will decide to cut the one-day repurchase rate again when it meets next week there will be no guarantee that the baht value will weaken against the dollar”.