Thai rate cut 1 percentage point

 The committee reasoned that there is high tendency that the economy would contract sharply in the fourth quarter of this year and in 2009.

 "The rate cut is expected to boost the economy in the near term, in light of likely sharp contraction. This is the signal that monetary policy would be exploited to stimulate the economy, at the time when inflationary pressure subsides," said Bank of Thailand Assistant Governor Duangmanee Vongpradhip.

Ahead of the MPC meeting on Wednesday, economists and the private sector had urged for the cut of 1 percentage point or more.