Fed’s decision anticipated by financial sector

[Lite Beer]

Fed’s decision anticipated by financial sector

BANGKOK: -- The decision of the US Federal Reserves to peg interest rates at its current level comes as no surprise to the financial sector who says that this was anticipated and should not have any severe effect on Thailand’s monetary market.

This was comment from several executives of commercial banks after Fed decided to maintain interest rates at between 0 – 0.25.

They said that the Fed was bound to do this sooner or later and this will force the values of Asian currencies to appreciate in the short-term.

They, however, stated that for the next 3 – 6 month period the baht is expected to drop in value and a close eye will have to be kept on the Chinese economy.

Should the Chinese economy not improve within the stated period, a further devaluation of the Yuan will probably be ordered which will correspondingly result in a further devaluation of the Baht.

Finance minister Apisak Tantivorawong also commented on the Fed’s decision to maintain interest rates at close to zero.

He said that this will not result in capital outflow abroad to take advantage of higher yields.

Bank of Thailand governor Prasarn Trairatvorakul also similarly confirmed this view commenting that this event was not out of the ordinary and will not result in major movement of capital.

Source: http://englishnews.thaipbs.or.th/feds-decision-anticipated-by-financial-sector

-- Thai PBS 2015-09-19