Thai central bank urged to consider raising interest with caution

BANGKOK, July 3 (TNA) – Finance and Deputy Prime Minister Surapong Suebwonglee on Thursday reiterated the Bank of Thailand and its Monetary Policy Committee consider any possible increase of the interest rate with caution.
He said that raising the interest rate would have positive and negative repercussions on the public and various segments of government, business and academia.
Should the deposit rate be raised while the inflation rate is high, it would help boost the incomes of depositors and could serve as an alternative way to bring about savings.
Simultaneously, the lending rate hike would fuel costs of entrepreneurs and the burdens of borrowers of housing loans.
Therefore he wanted financial institutions, the central bank and the Monetary Policy Committee to consider the question of interest rate adjustment properly.
Regarding the interest rate hike, he conceded, the government needed to adjust its investment plans for many mega projects, requiring a total investment of Bt1.7 trillion, more carefully so that they would not affect the fiscal position in the long term.
Federation of Thai Industries chairman Santi Vilassakdanont admitted that the interest hike would fuel costs of entrepreneurs.
The entrepreneurs had to bear burdens from higher wages, oil prices and inflation rates. Some needed to raise product prices to ease the burdens.
Should prices rise considerably, consumers might slow their purchases. So, as an entrepreneur, he did not want to see the interest rate increase too sharply.
Pramont Sutheewong, chairman of the Thai Chamber of Commerce, said the private sector did not want to see lending rate edge up.
Nonetheless it was aware that surging inflation would fuel burdens borne by the public in all segments.
Therefore he sees it is necessary for the Finance Ministry and the central bank to find an appropriate measure to curb rising inflation, he said.