ID :
132827
Wed, 07/14/2010 - 09:06
Auther :
Shortlink :
http://m.oananews.org//node/132827
The shortlink copeid
MPC likely to raise policy interest rate by quarter percentage point: KRC
BANGKOK, July 14 – The Bank of Thailand Monetary Policy Committee (MPC) is likely to raise the policy interest rate by 25 basis points to 1.50 per cent from 1.25 per cent at the fifth round of its meeting for this year on July 14, according to Kasikorn Research Center (KRC).
However, the leading think tank said MPC might opt to keep the reference rate unchanged at the upcoming meeting and raise it at the next round of its meeting on August 25.
No matter what is decided in both cases, Kasikorn sees little difference in the committee adjusting the rate to the normalised level because the time between the meetings is only six weeks.
Kasikorn believes Thailand's economic growth risk remains in a manageable range during the rest of this year while the inflation rate risk is likely to increase next year.
Should the MPC opt to raise the reference rate, it would move in the same direction as many other central banks in Asia-Pacific to tighten monetary policy.
As for adjustments of the money market in the next period, Kasikorn said, it depends on the resolution of MPC in the upcoming meeting and the signal it gives on a continued increase in the policy interest rate in the rest of the year as well as its perspective on the local and overseas economic outlook.
KRC said the interest adjustment by commercial banks in the future depends on their competence in loan expansions.
Should the MPC decide to raise the policy interest rate, it would encourage the commercial banks to consider increasing both deposit and lending rates, but the timing and extent of the increase will depend on the economic strength, competition environment, and liquidity management in the system by concerned officials, KRC said. (MCOT online news)
However, the leading think tank said MPC might opt to keep the reference rate unchanged at the upcoming meeting and raise it at the next round of its meeting on August 25.
No matter what is decided in both cases, Kasikorn sees little difference in the committee adjusting the rate to the normalised level because the time between the meetings is only six weeks.
Kasikorn believes Thailand's economic growth risk remains in a manageable range during the rest of this year while the inflation rate risk is likely to increase next year.
Should the MPC opt to raise the reference rate, it would move in the same direction as many other central banks in Asia-Pacific to tighten monetary policy.
As for adjustments of the money market in the next period, Kasikorn said, it depends on the resolution of MPC in the upcoming meeting and the signal it gives on a continued increase in the policy interest rate in the rest of the year as well as its perspective on the local and overseas economic outlook.
KRC said the interest adjustment by commercial banks in the future depends on their competence in loan expansions.
Should the MPC decide to raise the policy interest rate, it would encourage the commercial banks to consider increasing both deposit and lending rates, but the timing and extent of the increase will depend on the economic strength, competition environment, and liquidity management in the system by concerned officials, KRC said. (MCOT online news)
