ID :
139367
Thu, 08/26/2010 - 10:31
Auther :
Shortlink :
http://m.oananews.org//node/139367
The shortlink copeid
BoT likely to increase inflation-targeting framework next year
BANGKOK, Aug 26 – Bank of Thailand (BoT) Governor Tarisa Watanagase on Wednesday conceded the central bank might consider increasing the inflation-targeting framework next year as it believed that the inflation rate could reach the top targeting level of 0.5-3% set by the bank.
She said raising the policy interest rate by 25 basis points by the Monetary Policy Committee (MPC) should not adversely affect the Thai economy because the domestic interest rate remains the lowest in the region.
In contrast, it would help encourage local savings as the current interest rate remains negative when compared with the rate of inflation.
The policy rate rise would improve interest returns and make various economic segments more balanced, she said.
Mrs Tarisa said the short-term foreign capital inflow had not only stemmed from the interest rate hike but also from the economic strength of the region.
Foreign capital had flowed into Thailand early this year and out of the country during April and May. Now, it had come back in both the capital and bond markets.
Also, the BoT chief attributed the capital inflow to Thailand’s strong economic growth, export surge, and tourism recovery.
She revealed MPC decided to raise the policy interest rate because the economic data released by the National Economic and Social Development Board showed the Thai economy is stronger than expected and is likely to continue growing in terms of consumption and investment.
Simultaneously, external economic factors are of no concern as the US economy had just slowed down and the European economies had improved slightly, she said, adding that the central bank would continue monitoring the situation closely. (MCOT online news)
She said raising the policy interest rate by 25 basis points by the Monetary Policy Committee (MPC) should not adversely affect the Thai economy because the domestic interest rate remains the lowest in the region.
In contrast, it would help encourage local savings as the current interest rate remains negative when compared with the rate of inflation.
The policy rate rise would improve interest returns and make various economic segments more balanced, she said.
Mrs Tarisa said the short-term foreign capital inflow had not only stemmed from the interest rate hike but also from the economic strength of the region.
Foreign capital had flowed into Thailand early this year and out of the country during April and May. Now, it had come back in both the capital and bond markets.
Also, the BoT chief attributed the capital inflow to Thailand’s strong economic growth, export surge, and tourism recovery.
She revealed MPC decided to raise the policy interest rate because the economic data released by the National Economic and Social Development Board showed the Thai economy is stronger than expected and is likely to continue growing in terms of consumption and investment.
Simultaneously, external economic factors are of no concern as the US economy had just slowed down and the European economies had improved slightly, she said, adding that the central bank would continue monitoring the situation closely. (MCOT online news)
