Bank Of Thailand To Adjust Interest Rates

[Jai Dee]

THE BOT GOVERNOR HAS ADMITTED THE POLICY INTEREST RATE RISES WERE NOT ABLE TO KEEP UP WITH INFLATION

The governor of the Bank of Thailand has admitted there were several factors to be considered before today's adjustment of the interest rate in the monetary policy committee meeting.

BOT Governor M.R. Pridiyathorn Devakula (ปรีดิยาธร เทวกุล) said whether or not there will be an increase in the policy interest rate will require evaluation of domestic factors and the inflation rate, rather than foreign factors, such as the U.S. Federal Reserve's interest rate.

The governor said the BOT wants real deposit interests to be positive in the future. However, the policy interest rate is currently below the very high inflation rate resulting from the high oil prices, but this should decline after 2 months of diesel price floatation. M.R. Pridiyathorn said this will make the interest rate in the market move closer to the inflation rate, and eventually rise until the real interest rate is positive.

However, the BOT governor admitted that over the previous period, inflation had accelerated faster than expected due to the higher oil prices. Meanwhile the policy interest rate was still not able to keep up with inflation, causing the real interest rate to be negative. The central bank previously expected the real interest rate to return to a positive situation by the middle of this year.

Source: thaisnews.com ประจำวันพุธที่ 7 กันยายน 2548

[Jai Dee]

KRC EXPECTS THE BOT TO RAISE THE INTEREST RATE

The KASIKORN Research Centre (KRC) expects that the Bank of Thailand (BOT) will probably raise the interest rate by 0.25 percent.

The KASIKORN Research Centre Co., Ltd. has analysed the BOT’s decision by suggesting that the raise policy on interest rates would be aimed at balancing the stability of prices and inflation rates, as well as to push up actual interest rates at the same time.

Meanwhile, the BOT is expected to decide to increase the 14-day repurchase rate by 0.25 percent to 3 percent from 2.75 per cent.

KRC viewed the BOT would not decide to raise the interest rate by too much, since it had realized the move would not help lessen inflation rate risks caused by the oil price surge. In addition, it could wear away confidence in the local private sector.

According to the KRC, the current economic uncertainties might have an affect on loan expansions by commercial banks, as well as vague monetary policies that might not help reduce liquidity.

Source: thaisnews.com ประจำวันพุธที่ 7 กันยายน 2548

[Jai Dee]

THE PM HAS AGREED WITH BOT’s REPO INCREASE

The Prime Minister has agreed with the Bank of Thailand (BOT) announcement to increases its 14-day repurchase rate (repo).

Police Lieutenant Colonel THAKSIN SHINAWATRA (ทักษิณ ชินวัตร) commented in his second weekly press conference today that he agrees with the BOT decision to increase the interest rate of the 14-day repurchase rate or (repo) to go up by 0.5 per year.

The BOT disclosed that the interest rate adjustment would not affect the country’s economic figures.

The Premier said the overall growth rate for the Thai economy in 2005 should still exceed projections, since the growth recorded in the first two quarters had exceeded 3.9 percent.

Therefore, the Thai economy will probably grow by a higher than expected 4.2 percent in the second half of the year.

Source: thaisnews.com ประจำวันพฤหัสบดีที่ 8 กันยายน 2548