The general consensus among policymakers, analysts and members of the business community is that the central bank will have to further slash the key interest rate today. The question is the extent of the cut.

So far this year, the Bank of Thailand has cut the signal rate twice by 0.25 percentage point each time as inflationary pressure subsided. The inflation rate decreased from 3 per cent in January, to 2.3 per cent in February and 2 per cent in March.

A further rate cut, which would indicate a downward trend in the interest rate in this country, is also expected to dampen the appreciating Thai baht.

However, some economists have noted that the previous 0.25 percentage point cuts did not have a discernible impact on spurring economic growth. As a result, some have called for the central bank to lower the rate by at least 0.75 percentage point or even 1-per cent this time.

Thus, the central bank faces a dilemma on whether to take a conservative approach and cut the rate by another 0.25 percentage point just to keep inflation at bay or to take more invasive measures to stimulate growth.

The private sector, however, has called for a sharp cut of 1 per cent to stimulate domestic consumption, as there are concerns that the country's economic growth rate for this year might not reach 4 per cent otherwise.

If that were the case, the legacy of the interim government's economic management would fall into doubt and the democratically-elected government that succeeds it would have a hard time putting the country's economy back on a path towards more robust growth.

It would have been easier for the Bank of Thailand to make its decision on the rate cut if inflation pressure appeared to be under control.

However, major factors continue to push inflation including ongoing political uncertainty on the domestic front and brewing tensions in the Middle East, which have put pressure on global oil prices.

Iran's release of British soldiers last week lowered temperatures considerably, but the conflict in the Middle East over the Islamic republic's nuclear ambitions could flare up at any time.

The BOT, which had once strongly confirmed its stance to focus mainly on an inflation-targeting framework, stoked some hopes in the market by signalling that a 50 basis-point cut would make sense if economic growth ended up being lower than expected, as inflation was under control.

The private sector, however, now thinks that a small rate cut may not be enough and is calling on the bank to cut its policy rate by as much as 100 basis points to quickly stimulate domestic consumption, which has been in the doldrums due to political instability.

We don't have the perfect answer on what the appropriate rate cut should be, but we believe strongly that the Bank of Thailand must be given a free hand to run its monetary policy.

A conservative cut may make hardly any difference under the current situation in which inflation pressure is otherwise small due to the prevailing lack of consumer confidence.

On the other hand, a sharp rate cut may be too risky even though it may be politically popular in the short term.

The Monetary Policy Committee's decision will demonstrate whether the central bank is able to strike a delicate balance between its essential role of guarding against monetary and financial instability and the strong urge to reinvigorate the country's sluggish economy.