Policy Interest Hike Holds Despite Higher Risks, Says Bank Of Thailand

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Policy interest hike holds despite higher risks, says BoT

BANGKOK, Feb 9 – Bank of Thailand (BoT) Governor Prasarn Trairatvorakul on Tuesday affirmed that the central bank’s perspective on the policy interest rate increase remained unchanged although the Thai economy experienced higher risks from economic volatilities and political uncertainties both at home at abroad.

Whether the Monetary Policy Committee will consider raising the policy rate quickly or slowly, he said, and whether raising it considerably or slightly, depended on economic conditions.

“Risk factors to the overall economy have not changed significantly from those assessed at the previous meeting of the MPC," he said, "when most [committee members] believed that the interest rate should be raised gradually to assess the situation.”

Mr Prasarn said the current accelerating inflation stemmed from higher production costs and increasing oil and food prices as well as rising demands on the economy and consumer recovery.

The central bank must also monitor the impacts of the rising inflation in coming period. It would also keep a watch on the Brent crude oil price, which had passed US$100 per barrel recently, because Thailand is an oil importer.

Regarding border clashes between Cambodia and Thailand, he said the central bank did not worry the situation would affect Thailand’s economic expansion this year because the portion of Thai exports to Cambodia is very small. (MCOT online news)

-- TNA 2011-02-09