No Change To Thailand's Interest Rates Tipped

[george]

No change to interest rates tipped

BANGKOK: -- The Monetary Policy Committee (MPC) is expected to keep its interest rate policy unchanged when it meets tomorrow, as the economy appears to have picked up growth momentum.

A key positive indicator is the corporate investment loan sector, which returned to growth late last year after 10 months of contraction.

Bandid Nijathaworn, the Bank of Thailand's deputy governor, told a Nation Multimedia Group briefing last Friday that the latest figures are encouraging and hoped the momentum would be sustained.

Previously, corporate loans were mostly granted for working capital, not for investment in capital goods.

Figures show that corporate investment loans recorded a 0.6 per cent year-on-year growth in December 2007 after a negative growth rate of 1.2 per cent in June and minus 1.8 per cent in September 2007.

In terms of the overall credit market, February 2008 figures show a 5.3 per cent year-on-year growth, with a total of Bt7.2 trillion in loans outstanding.

The March 2008 growth rate was 4.5 per cent year-on-year.

In terms of imported capital goods, the year-on-year growth rates were 23 per cent in February and 60.5 per cent in January.

According to Bandid, domestic consumption also started to recover in the third quarter of last year after 2-3 years of extended weakness.

The retail, credit-card and housing sectors have enjoyed relatively strong growth over the past few months, he noted.

However, the central bank's deputy chief said authorities are closely watching the inflation trend as the March figure of 5.3 per cent is rather high.

On the effects of the US sub-prime loan crisis on Thai banks and financial institutions, Bandid said the negative consequences have been restricted due to limited exposure of assets.

In addition, the average capital adequacy ratio of Thai banks and financial institutions is currently quite high at 14.6 per cent.

As far as the interest rate is concerned, sources said the MPC is unlikely to cut its one-day re-purchase rate further from the current 3.25 per cent as expected earlier.

That is because of the ongoing growth momentum, as indicated by corporate loans for capital goods, and higher inflation, sources said.

-- The Nation 2008-04-07

[cclub75]

BANGKOK: -- The Monetary Policy Committee (MPC) is expected to keep its interest rate policy unchanged when it meets tomorrow, as the economy appears to have picked up growth momentum.

What a bet ! Style "you can't loose".

With an inflation skyrocketting... the BOT is trapped : they can't move.

You will notice the real change of tone : in january the BOT was ready to cut interest rates... Now it's over.

Of course the boiler room (real estate and other sectors) is not happy. But who cares ?

Right now, Thailand (and many other countries) just can't cut their interest rates. And if you consider inflation, they should actually increase them (we can have negative real interest rates...).

[bingobongo]

that is fantastic news

so what is poor som chai to do now with the confetti in his wallet? spend his earnings on gas? pork? rice? condo? how does he manage to utilize his money with rampant inflation? decisions decisions

[lannarebirth]

that is fantastic news

so what is poor som chai to do now with the confetti in his wallet? spend his earnings on gas? pork? rice? condo? how does he manage to utilize his money with rampant inflation? decisions decisions

Usually real estate is considered a good investment during inflationary periods. Especially if one has low, fixed rate financing against it. The theory being that you're paying back your loan with inflated dollars. Stocks tend to fare less well.

[bingobongo]

do you see a problem here? not just pork and rice in LOS...........the cat is out of the bag, raise rates or soon payment will be made in confetti

discontent is building

(Mon 7 Apr 2008)

Ukraine: Surging Food Prices Propel Ukrainian Inflation Beyond Government's Control

Cambodia: Cambodia's Opposition Party Leads Protests Against Rising Food Prices

South Korea: Consumer Sentiment Falls to 11-Month Low in South Korea

Taiwan: Inflation Accelerates in Taiwan as Food Prices Rise

Armenia: Central Bank of Armenia Lifts Interest Rate Further as Inflation Accelerates

Kazakhstan: Kazakhstan's Producer Prices Surge in March

Austria: Austrian Wholesale Price Inflation Jumps to New 27-Year High in March

Germany: German Manufacturing Orders Slip Modestly in February

Ireland: Irish Unemployment Benefit Claimants at Highest Level Since July 1999 in March

Lithuania: Lithuanian Producer Price Index Grows 21% Y/Y in March

Gulf States: GCC Trade Offences Rise Amid High Inflation

Iran: Economy Minister Claims Iranian Government Has Failed to Control Inflation

Edited April 7, 2008 by bingobongo