Monetary Policy Committee Fears Inflation

The Monetary Policy Committee has raised concerns that rising fuel prices could trigger inflation, while the economy remains fragile.

Member of the Monetary Policy Committee, Amphon Kittiampon says that the Thai economy is at risk of inflation due to rising fuel prices and negative interest rates.

Amphon pointed out that the committee may have to implement some interest rate adjustments in anticipation of the inflation since it may take up to three quarters to take effect.

He also believes that despite the interest rate adjustment, the economy will continue to experience strong growth driven by growing domestic consumption, investment and export.

Amphon also said that despite the second round of quantitative easing implemented by the United States, which will flood the global economy with 600 billion baht in liquidity, less investment capital than anticipated will enter Asia, with most of it being spent on restructuring short and long term bonds.

This will make it likely that the baht will remain lower than 27 to 28 baht against the greenback.

Amphon also claims that the Bank of Thailand has been trying to stabilize the current exchange rate at around 30 baht per US dollar.

Meanwhile, Adviser to the Prime Minister, Kanok Wongtra-ngan has expressed some concern that the Thai economy could be affected by political factors at any time.

At the same time, external factors are also worrisome.

Kanok has cautioned that monetary measures must be carefully implemented and says that the state needs to promote long term investment projects aimed at developing labor skills, logistics and IT infrastructure to lessen social and economic disparities.

-- Tan Network 2010-12-07

Monetary Policy Committee Acts Against Inflation

The Monetary Policy Committee, in a move designed to prevent excessive inflation in Thailand, has banned the sale of air pumps...

Edited December 7, 201015 yr by phaethon

The Monetary Policy Committee has raised concerns that rising fuel prices could trigger inflation, while the economy remains fragile.

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He also believes that despite the interest rate adjustment, the economy will continue to experience strong growth driven by growing domestic consumption, investment and export.

I guess we have a new phase in the economic cycle. Strong Fragile Growth.

Amusing Thailand.