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BOT Hikes Rate to Curb Inflation


snoop1130
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BANGKOK (NNT) - The Bank of Thailand (BoT) hiked its key interest rate for the first time in nearly four years on Wednesday (August 10), increasing it by a quarter percent to combat growing inflation as the economy recovers.

 

As consumer inflation remains at 14-year highs, the central bank finally joined most of its peers in raising rates, but it emphasized that the increases would be modest.

 

The monetary policy committee (MPC) of the BOT voted 6-1 to boost the one-day repurchase rate from a record low of 0.50%, which had remained steady since May 2020, to 0.75 percent.

 

The previous increase occurred in December 2018.

 

To reduce pricing pressures, the BoT had suggested a gradual tightening of monetary policy. The consumer price index (CPI) climbed 7.61% year-over-year in July, greatly exceeding its intended range of 1-3%. This increase was primarily attributable to rising energy prices.

 

Finance Minister Arkhom Termpittayapaisith stated earlier that commercial banks should not rush to boost their interest rates despite the central bank’s plan to tighten monetary policy.

 

The finance minister and governor of the Bank of Thailand (BoT), Sethaput Suthiwartnarueput, believe that gradual moves are adequate to combat inflation without harming economic growth, even though other Asian nations have increased their policy rates by more than 100 basis points this year in response to the Federal Reserve’s tightening.

 

Source: https://thainews.prd.go.th/en/news/detail/TCATG220811112422815

 

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17 hours ago, snoop1130 said:

The consumer price index (CPI) climbed 7.61% year-over-year in July, greatly exceeding its intended range of 1-3%. This increase was primarily attributable to rising energy prices.

 

So !

The previously published figure of 5.6 % was not true then !

So is this one Kosha ?

Hmmmm

The Government are trying to initiate a whole raft of measures to reduce Inflation, and have a big Pow-wow with several agencies involved to brain storm next week on this problem.

One thing for sure is that the MPC of the Bank of Thailand do not want to raise Interest rates, as this will push Thousands of already over leveraged borrowers into NPL, which in turn will affect the Government Credit Ratings and all that that entails.

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8 hours ago, nobodysfriend said:

Inflation at 7.61% , interest rates at 0.75% ... not fair , not enough .

They could as well have cut the rate by 0.25%, as the effect would be the same, meaning zilch...

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38 minutes ago, StayinThailand2much said:

They could as well have cut the rate by 0.25%, as the effect would be the same, meaning zilch...

Exactly. The US Fed has flooded the world with a tsunami of dollars. Nothing can hold that back.

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4 minutes ago, timendres said:

Exactly. The US Fed has flooded the world with a tsunami of dollars. Nothing can hold that back.

Yes, and I don't think that the inflation is 'transitory' in the sense that 50% price-increases for some products will be 'rolled back' once core inflation is back at 2 or 3%. I fear, many of the price increases will be permanent.

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10 hours ago, nobodysfriend said:

Inflation at 7.61% , interest rates at 0.75% ... not fair , not enough .

 

Government allow banks to run roughshod over depositors.

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