Thai central bank holds interest rate

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Thai central bank holds interest rate

BANGKOK, September 17, 2014 (AFP) - Thailand's central bank held its key interest rate Wednesday as the kingdom's economy showed signs of improvement, a day after the junta-appointed parliament approved a boost in spending.

The Bank of Thailand kept its policy rate at 2.00 percent, a level set in March in a bid to spur the economy after months of political protest rattled consumers, tourists and investors.

"Improving private confidence and a rebound of private and public spending have shored up domestic demand," Monetary Policy Committee secretary Mathee Supapongse said in a statement.

But explaining the committee's unanimous decision to hold the rate, he warned that the economy was still in "an early stage of recovery."

Thailand's economy grew 0.9 percent in the second quarter after shrinking 1.9 percent in the preceding three months -- dodging recession after the military ended months of political deadlock by toppling the elected government in May.

Junta chief and Thai premier Prayut Chan-o-Cha has pegged his regime's legitimacy to reviving the economy after political unrest froze government spending under ex-premier Yingluck Shinawatra.

In a meeting late Tuesday the army-appointed National Legislative Assembly approved Thailand's 2015 budget of 2.58 trillion baht ($80 billion).

Prayut has previously said the spending plan is around $1.6 billion more than 2014.

Analysts said the "unsurprising" rate hold reflected the economy still had some way to go before a full recovery.

"Consumer confidence and business sentiment are both back to levels seen before the most recent political crisis erupted in November," Capital Economics said in a briefing note.

With the economy "some way away from full health" it predicted the central bank would maintain the rate for the rest of the year to spur growth.


-- (c) Copyright AFP 2014-09-17

[worgeordie]

Wish they would put the rates up,inflation is slowly eating

away at any cash you have,as inflation is a lot higher than

2% and whatever figurer the Govt. says it is,everything

seems to be geared towards the borrower and those in

debit.

regards Worgeordie

[JacChang]

That's why you don't hold cash.

No problem here. Holding 5-14% returning assets.

Markets change, economies change, we also need to change to adapt to these circumstances. There is always two sides to any game, the winning side and the losing side. Low interest rates, helps companies to borrow at lower rates, and enabling them to expand their investments at a lower cost, and also gives them an opportunity to "borrow more" to pay off the higher interest rate loans.

Situations like this, I know which side I am on.