Central bank urged not to rush to raise policy interest rate

BANGKOK: -- The Bank of Thailand (BoT) Monetary Policy Committee should not rush to increase the policy interest rate when its meets July 16 despite concerns at fast-rising inflation, warns the Federation of Thai Industries (FTI).

FTI chairman Santi Vilassakdanont said he did not believe that the short-term repurchase rate rising by 25 basis points would help allay with the current rise in inflation, which is mainly caused by rising oil prices.

The central bank should monitor the situation for another three months before making a decision on the interest rate, he advised.

Mr. Santa said the bank should not panic in response to surging inflation because the latest economic data showed that prices of products other than oil, such as rice, had begun to decline.

Also, it is expected that oil prices would not increase considerably above their present level from now on.

Mr. Santi said that the inflation rate might not push upwards as much as earlier expected. At present, Thailand's inflation rate is not as great in comparison with those of other countries in the region.

Consequently, he saw no need to rush to raise the interest rate to curb inflation for now.

-- TNA 2008-07-07

See no evil, hear no evil......

Yeah, keep the spending and cheap credit rolling!!! Happy days! No inflation anywhere...just oil...

Sigh....

Cheers!