ID :
112268
Thu, 03/18/2010 - 09:28
Auther :
Shortlink :
http://m.oananews.org//node/112268
The shortlink copeid
Fed’s decision to maintain interest rate lives up to expectation: BoT
BANGKOK, Mar18 (TNA) – Bank of Thailand (BoT) Deputy Governor Bandid Nijathaworn on Wednesday indicated the United States Federal Reserve’s decision to keep the short-term interest rate unchanged at 0.25 per cent lived up to what the market and the central bank expected.
He said Fed had signaled several times that the low interest rate is necessary as it would help the US economy recover strongly and without interruption.
The US economy continued experiencing many risk factors including a high unemployment rate, slow loan growth, and possible long-term interest hikes due to the current account deficit.
“The decision to maintain the interest rate underlines Fed’s need to make the US economy continue to recover, which will contribute to global economic growth. Simultaneously, the inflation rate stays unchanged,” he said.
Mr Bandid said the Fed’s decision would encourage the capital outflow from the US to Asian countries since many countries believed Asian economies would recover more rapidly than the US and European economies.
It would fuel the strengthening of Asian currencies including the baht.
He conceded the foreign capital inflow had not yet been seen clearly until the past few days, which saw the large capital funds flow into the stock market and the secondary market.
Regarding the foreign capital inflow direction, he said, should the Asian economies including the Thai economy recover clearly, it would draw the foreign capital into the region continuously.
At the same time, inflationary pressure in Asia would accelerate more rapidly than in Europe and the US since the regional economy had recovered more strongly.
The Thai economy had also recovered more strongly than expected, particularly in the fourth quarter of last year. As a result, the need to keep the interest rate low to help stimulate the economy had eased.
Mr Bandid said the central bank would take into account these factors at the Monetary Policy Committee’s meeting to be held on April 21. (TNA)
He said Fed had signaled several times that the low interest rate is necessary as it would help the US economy recover strongly and without interruption.
The US economy continued experiencing many risk factors including a high unemployment rate, slow loan growth, and possible long-term interest hikes due to the current account deficit.
“The decision to maintain the interest rate underlines Fed’s need to make the US economy continue to recover, which will contribute to global economic growth. Simultaneously, the inflation rate stays unchanged,” he said.
Mr Bandid said the Fed’s decision would encourage the capital outflow from the US to Asian countries since many countries believed Asian economies would recover more rapidly than the US and European economies.
It would fuel the strengthening of Asian currencies including the baht.
He conceded the foreign capital inflow had not yet been seen clearly until the past few days, which saw the large capital funds flow into the stock market and the secondary market.
Regarding the foreign capital inflow direction, he said, should the Asian economies including the Thai economy recover clearly, it would draw the foreign capital into the region continuously.
At the same time, inflationary pressure in Asia would accelerate more rapidly than in Europe and the US since the regional economy had recovered more strongly.
The Thai economy had also recovered more strongly than expected, particularly in the fourth quarter of last year. As a result, the need to keep the interest rate low to help stimulate the economy had eased.
Mr Bandid said the central bank would take into account these factors at the Monetary Policy Committee’s meeting to be held on April 21. (TNA)
