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Foreign capital begins flowing at slower pace, says BoT

BANGKOK, Nov 12 – Foreign capital has begun flowing into Thailand at a slower pace although the baht continued strengthening, according to the Bank of Thailand (BoT).

Mathee Supapongse, senior director of BoT’s Domestic Economy Department, said the baht remained strong because the US dollar continued weakening against all currencies and foreign capital still flowed into Thailand.

However, the foreign capital influx had begun to slow to a certain extent. The central bank had managed the baht as usual and planned to closely monitor the capital inflow because economic uncertainties remain.

At a next meeting of the Monetary Policy Committee to be held on Dec 1, he said, the central bank will take into account all factors that have an impact on the economy.

Included are the overall economy in October, inflation rates, currency exchange rates and capital movements.

The central bank believed the recent floods and other natural disasters would have only temporary impact. They are not the main factors that would have an impact on the monetary policy implementation.

He said the core inflation rate is likely to miss the estimated range of 0.5-3 per cent in the middle of next year due mainly to an increase in the local demand.

“How the MPC will consider and decide on the policy interest rate depends on data gained in a particular period.”

Mr Mathee said a call by producers for a price rise of various products with the Commerce Ministry is considered one of factors that is fueling inflationary pressure.

He said the central bank had not yet seen any sign of bubbles in the property business. The Bank of Thailand closely monitors the situation, but has found nothing wrong. (MCOT online news)

-- TNA 2010-11-12