Thai policy rate unchanged

[webfact]

Thai policy rate unchanged
The Nation

BANGKOK: -- The Bank of Thailand's Monetary Policy Committee resolved to maintain the policy rate at 2 per cent per annum at its meeting today.

Only one of seven members voted for a cut by 25 basis points.

The committee projects sustained economic recovery in 2015, and deems that the current monetary policy is sufficiently accommodative and does not hinder the ongoing recovery, according to a statement.

The stance is also consistent with long-term financial stability. Nevertheless, the committee expresses concerns regarding greater downside risks from global growth and the timeliness of public investment spending. One member assessed that further accommodation is needed in order to reinforce the momentum of economic recovery.

"The MPC will closely monitor developments of the Thai economy, and will pursue appropriate policy to ensure adequate support to the recovery, as well as long-term financial stability," it said.

Several economic houses expected the the MPC to maintain the policy rate, though given low inflationary pressure there is greater flexibility for a rate cut. According to HSBC, high household debt could be one factor that would convince the members not to cut the rate.

Source: http://www.nationmultimedia.com/business/Thai-policy-rate-unchanged-30247046.html


-- The Nation 2014-11-05

[rickirs]

"... the committee expresses concerns regarding ... the timeliness of public investment spending."

The government's big stimilus spending plan for 2015 will put a lot more money into circulation, increasing the availability of capital for domestic purposes. That's good for a short-term boost for the economy.

However, stimilus spending may drive down demand of capital from the banks. The banks would then have to lower their interest rates to attract borrowers. The result would be a decrease in bank profits. The big banks are not known for their charity and Gen. Prayuth may get caught in a dilemna of wanting fast GDP growth to boost the Junta's economic credibility with the public but loose support of the banks.

[Acharn]

Is there a web site that gives official statistics, or is that information still considered "state secrets?" I'd like to find out what the government thinks the current inflation rate is. If the policy rate is only 2% they must think it's pretty low and are not worried it's going to accelerate in the near term (I wish the U.S. Federal Reserve Bank felt that way, but they're already looking at steps to stop rising wages).