Bot Keeps 14-day Repo Unchanged

BOT keeps 14-day repo unchanged

BANGKOK: -- The Bank of Thailand’s Monetary Policy Committee (MPC) decided at its meeting yesterday to maintain the 14-day repurchase rate at 2% per year, citing it would wait to see impacts from last month’s tsunamis on the economy.

Atchana Waiquamdee, the BOT’s Assistant Governor in charge of the Monetary Policy Group, said MPC assessed repercussions from the massive tidal waves and conceded tourism revenue would reduce, which could affect the gross domestic product (GDP) this year.

However, with the financial support from the investment sector and state spending on the rehabilitation, the situation was expected to return to normal soon.

So, the committee wanted to wait for around six months to see how extensive the disaster would have impacts on the economy.

Should the state spending on and investment in the rehabilitation be large and quickly enough, the situation would be back to normal sooner.

She said the committee was unable to estimate how much the state would spend on the rehabilitation. It had to wait for the new government to set aside the mid-year budget of 70 million baht for the rehabilitation purposes

According to the data provided by the Tourism Authority of Thailand and the Fishery Department, the tourism in Phuket should recover in third quarter of this year, and that in Krabi and Phang-na would return to normal next year.

Mrs Atchana said the fluctuation in the foreign exchange rate market and high fuel prices would have an impact on the overall picture of the economy.

She said the BOT should oversee the interest movement to ensure the rates are adjusted upward to the proper level.

--TNA 2005-01-20