Thai money, capital markets react to Greece's general election results

BANGKOK, June 18 (TNA) - Executives of the Bank of Thailand (BOT) discussed the ongoing European debt crisis in Bangkok Monday; while the domestic money and capital markets had reacted to the general election result in Greece. The meeting of the BOT's Financial Institutions Policy Committee and the Monetary Policy Committee, chaired by BOT Governor Prasarn Trairatvorakul, discussed the European debt crisis and possible impacts on Thailand. As a political party which supports austerity policies won the general election in Greece on Sunday, the Stock Exchange of Thailand (SET) index peaked at 1,181.69 points Monday morning, an increase by 15.96 points, with buy orders being active particularly for energy and commercial bank stocks and analysts believing the situation in Greece to improve. However, gold prices on the domestic market remained unchanged. Jitti Tangsithpakdi, President of the Gold Traders Association, explained that the June 17 general election result in Greece turned out as many parties expected; so, the world gold prices have remained unchanged. Jitti assessed if the US Federal Reserve Board of Governors decided on June 19-20 to inject liquidity for the third round, the world gold prices should rise. Meanwhile, Kanit Saengsuphan, Director of the Fiscal Policy Research Institute, projected at a seminar on impacts of the euro zone debt crisis and solutions if the European economy contracted by 0.9 per cent, the Thai economy would expand by 5.5 per cent and if the gross domestic product (GDP) of Europe fell by 5 per cent and affected worldwide economies, the Thai economy would grow by only 2.2 per cent. Supawut Saichua, managing director for research of Phatra Securities Public Company Limited, noted that international investors were satisfied with Greece's general election results, as they believed it would keep Greece in the European Union (EU). Supawut foresaw that the European debt woes should have limited impacts on Thailand because confidence remained in the domestic money and capital markets. Besides, most Thai exports to Europe are food products which are necessary for European people, admitting, nonetheless, that there might be some indirect impacts on the Thai economy. (TNA)