ID :
146857
Wed, 10/20/2010 - 19:08
Auther :
Shortlink :
http://m.oananews.org//node/146857
The shortlink copeid
Bank of Thailand keeps policy interest rate unchanged at 1.75 per cent
BANGKOK, Oct 20 – The Thai central bank's Monetary Policy Committee (MPC) Wednesday acted to maintain the policy interest rate at 1.75 per cent per annum as the world economy is likely to slow down, Paiboon Kittisrikangwan, Assistant Governor of the Bank of Thailand (BoT) said.
The global economy continues to recover but is expected to slow somewhat in the period ahead which may have a negative impact on Thai exports, the BoT said in its statement, adding that the US and Japanese economies remain fragile due to risks from high unemployment and sluggish recovery in consumption.
In the meantime, the European economies still face the challenge of managing high fiscal deficits next year.
The Thai economy is expected to grow primarily due to domestic demand.
Nevertheless, the risk that decelerated global growth may adversely impact Thai exports remains, the statement said.
“We think we should consider it with prudence to evaluate impacts from uncertainty of the global economy. The MPC also took into account the impact from Chinese interest rate increase of 0.25 per cent,” Mr Paiboon said.
A negative real interest rate is not appropriate to the Thai economy but it must gradually normalise. The monetary policy group considered several factors. The currency exchange rate is not the policy’s target and the baht strengthening was caused both by capital inflows and excessive liquidity in the global financial system.
Method to oversee the currency exchange rate is to let it flexible in line with the market mechanism. The BoT has already done that and has no additional measures at the moment, said the central bank assistant governor.
The assessment of the baht's rise--how it may affect Thai economic growth--will be conducted Oct 28 when the Gross Domestic Product (GDP) projection will be revised. However, the MPC is ready to convene an urgent meeting if the baht situation changes rapidly, he said.
The implementation of the interest rate policy is not the solution to all problems. The main target is price stablisation and economic balance. If the economy can go forward, target can be achieved quickly, he said.
Speaking about assistance to Small- and Medium -sized Enterprises (SMEs) affected by the baht surge, he said more measures such as credit support, buying insurance are needed. Businesses have to adjust themselves too. (MCOT online news)
The global economy continues to recover but is expected to slow somewhat in the period ahead which may have a negative impact on Thai exports, the BoT said in its statement, adding that the US and Japanese economies remain fragile due to risks from high unemployment and sluggish recovery in consumption.
In the meantime, the European economies still face the challenge of managing high fiscal deficits next year.
The Thai economy is expected to grow primarily due to domestic demand.
Nevertheless, the risk that decelerated global growth may adversely impact Thai exports remains, the statement said.
“We think we should consider it with prudence to evaluate impacts from uncertainty of the global economy. The MPC also took into account the impact from Chinese interest rate increase of 0.25 per cent,” Mr Paiboon said.
A negative real interest rate is not appropriate to the Thai economy but it must gradually normalise. The monetary policy group considered several factors. The currency exchange rate is not the policy’s target and the baht strengthening was caused both by capital inflows and excessive liquidity in the global financial system.
Method to oversee the currency exchange rate is to let it flexible in line with the market mechanism. The BoT has already done that and has no additional measures at the moment, said the central bank assistant governor.
The assessment of the baht's rise--how it may affect Thai economic growth--will be conducted Oct 28 when the Gross Domestic Product (GDP) projection will be revised. However, the MPC is ready to convene an urgent meeting if the baht situation changes rapidly, he said.
The implementation of the interest rate policy is not the solution to all problems. The main target is price stablisation and economic balance. If the economy can go forward, target can be achieved quickly, he said.
Speaking about assistance to Small- and Medium -sized Enterprises (SMEs) affected by the baht surge, he said more measures such as credit support, buying insurance are needed. Businesses have to adjust themselves too. (MCOT online news)
