The central bank is closely monitoring the shaky global recovery, BOT Governor Prasarn Trairatvorakul said yesterday.

The Monetary Policy Committee on Wednesday decided to cut the policy rate by 25 basis points because it believed this would boost economic growth, he said. "The MPC, if necessary, is ready to ease monetary policy further."

Though the seven members of the committee had different opinions on the amount of reduction, with most preferring 25 basis points while a minority preferred 50, all agreed the rate should be cut, he said.

Now that the country has entered the post-flood recovery phase, the central bank will assess how the economy is recovering, Prasarn said.

"The worst of the floods has passed," he said.

In response to the call for countries to prepare for a downturn in the global economy, Prasarn said the BOT had long prepared for the problem such as trying to manage international trade in order to have a current-account surplus. The central bank has also accumulated high reserves of foreign currency.

He noted that Thailand recovered quickly after the global financial crisis in 2008.

Asean+3 countries have also agreed to increase their currency-swap arrangement from the current US$120 billion (Bt3.6 trillion), he said. The swap would be utilised when a member country faces abrupt massive capital outflows that could destabilise its economy.

According to central bank data, capital worth Bt52 billion flowed out of Thailand last month.

It was the sixth consecutive month of outflows.

The banking sector saw large outflows as the banks repaid debts. The drop in exports as a result of the floods also caused outflows, as did the weakening baht.