BOT:Thailand's interest rates should be based on market mechanism

BANGKOK, May 24 (TNA) - Bank of Thailand (BOT) Governor Prasarn Trairatvorakul has recommended that domestic interest rates be allowed to move freely in accordance with the market mechanism. Prasarn said Thursday that Thailand's interest rates remain low, compared with those of neighbouring countries, and that the domestic interest rates are now higher than only Taiwan. The BOT chief pointed out if adjusted by updated inflation figures, Thailand's interest rates stand at minus 0.5 per cent on average currently. According to the BOT governor, a low interest rate will not boost domestic consumption and investment and any effective financial policy, focused on the handling of interest rates, needs to be supported by several relevant factors and an updated direction of key economic data. In response to comments on Thailand's different economic growth figures this year, projected by different agencies, the Thai central bank chief said that the phenomenon appears to be normal, as different assumptions may be used by different bodies, assessing, however, that Thailand's export growth should be only ond-digit this year due mainly to indirect impacts on the Thai economy from the ongoing European debt crisis. (TNA)