Thailand Holds Interest Rate At 3.0%

[webfact]

Thailand holds interest rate at 3.0%

Bangkok, May 2, 2012 (AFP) - The Bank of Thailand held interest rates at 3.0 percent on Wednesday for the second time in 2012 to bolster the nation's fragile economic recovery from devastating floods, the central bank said.

The Monetary Policy Committee said its earlier cuts to the benchmark rate -- the most recent in January -- had aided Thailand's rebound from last year's floods, but warned risks remained to the kingdom's export-driven growth.

The economy suffered a double-digit contraction in the fourth quarter of 2011, the sharpest on record, after the worst floods in half a century pummelled industry.

Official data Tuesday showed inflation rose 2.47 percent in April from a year earlier, a significantly lower rate than in March, encouraging the interest rate hold.

"Inflationary pressure is manageable so the committee has agreed that the current interest rate is suitable for supporting economic recovery," Paiboon Kittisrikangwan, the bank's assistant governor said in statement.

"So the committee unanimously agreed to keep the policy rate at 3.0 percent."

Economists urged the Bank of Thailand to keep rates on hold for the rest of the year, with exports and manufacturing still shrinking following the floods and inflation seemingly under control.

Usara Wilaipich, senior economist for Global Research at Standard Chartered Bank said the pace of recovery had been "generally disappointing".

"Exports contracted 3.9 percent and manufacturing production 7.2 percent year-on-year," she said.

"We maintain our call for the BoT to hold rates for the rest of this year, as inflation is expected to stay well-contained in 2012."

-- (c) Copyright AFP 2012-05-02

[theblether]

I suppose they had no choice, now watch inflation rip through people's savings.

[webfact]

BOT

BOT wary of inflation : Paiboon

Seetalavajit Sabayjai

The Nation

BANGKOK:-- Having decided to maintain the policy rate at 3 per cent yesterday, the Bank of Thailand's Monetary Policy Committee (MPC) continues to see risks from inflationary pressure and external factors.

At the current level of the policy rate, there is no sign of any problem regarding stability, and inflation is manageable, said Paiboon Kittisrikangwan, assistant governor and MPC secretary.

The current real interest rate is relatively low at about minus 0.3 per cent.

However, inflation risk exists because of the country's faster-than-expected economic recovery in the first quarter of the year, Paiboon said.

There is upward inflationary pressure due to a strong pickup in domestic demand, higher fuel prices and an increase in the minimum wage in key provinces.

"These could cause greater pass-through of higher costs to the prices of goods and services," Paiboon said.

As the euro-zone economy has entered recession and it will take time for its structural problems to be resolved, external factors also continue to pose a major risk to Thailand's economic growth, he said.

Given the country's faster-than-expected broad-based recovery in manufacturing, consumption and investment, "we expect they will remain the economic drivers in the second half", Paiboon said.

A revision of the BOT's economic forecast is expected to be announced on May 11. "The estimated economic figures may be adjusted because of the quicker-than-anticipated recovery in the first quarter," Paiboon said.

-- The Nation 2012-05-03

[sparebox2]

the 300 baht is to fight inflation.

however, many people like Mark, prefers to have the inflation, but no 300 baht.

[12DrinkMore]

the 300 baht is to fight inflation.

however, many people like Mark, prefers to have the inflation, but no 300 baht.

Please you could translate that?