Thailand's central bank slashed interest rates Wednesday by the largest amount in eight years, attempting to stave off recession as the economy reels from the global downturn and a week long shutdown of Bangkok's airports by anti-government protesters, AP reported.
The Bank of Thailand said 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.