ID :
169961
Tue, 03/22/2011 - 12:07
Auther :
Shortlink :
http://m.oananews.org//node/169961
The shortlink copeid
BOT governor warns oil price rise may spur inflation
BANGKOK, March 22 (TNA) - The Thai central bank governor has warned that rising oil prices may increase inflation to a higher rate than expected but they should not heavily affect the economy.
Prasarn Trairatvorakul, governor of the Bank of Thailand, said that unrest in Libya and the Middle East would raise oil prices on the global market but that they would not reach heights of past oil crises. Moreover, their increase has been gradual, so markets have been able to cope. He then assured that unless oil prices rise considerably from their present levels, they will not block the growth of the Thai economy or the world economy and that he still expects the Thai economy to grow by 3-5% this year.
He added, however, that oil prices may raise inflation in the fourth quarter faster than the 0.5-3% which had been earlier expected and that the price of Dubai crude could exceed 130 US dollars a barrel, from which Thailand may experience a balance of payments deficit this year. He did insist, though, that the deficit would not be large enough to threaten the national economy. The Bank of Thailand will apply its interest policies to handle inflation and will not intervene in foreign exchange rates. Its repurchase rate is the second lowest in Asia.
The central bank governor added that the Public-Private Committee discussed the fluctuation of yen on Monday and found that the yen has not appreciated significantly. It also viewed that earlier baht appreciation resulted from Thai exporters selling yen in advance and from the economic growth of Thailand and other Asian nations. However, the Bank of Thailand will continue to monitor the movements of the yen because Japanese companies in Thailand may send their money to help their mother companies in Japan. If that happens, the baht will become weaker, but if Thailand exports more products, the baht should be strong again. (TNA)
Prasarn Trairatvorakul, governor of the Bank of Thailand, said that unrest in Libya and the Middle East would raise oil prices on the global market but that they would not reach heights of past oil crises. Moreover, their increase has been gradual, so markets have been able to cope. He then assured that unless oil prices rise considerably from their present levels, they will not block the growth of the Thai economy or the world economy and that he still expects the Thai economy to grow by 3-5% this year.
He added, however, that oil prices may raise inflation in the fourth quarter faster than the 0.5-3% which had been earlier expected and that the price of Dubai crude could exceed 130 US dollars a barrel, from which Thailand may experience a balance of payments deficit this year. He did insist, though, that the deficit would not be large enough to threaten the national economy. The Bank of Thailand will apply its interest policies to handle inflation and will not intervene in foreign exchange rates. Its repurchase rate is the second lowest in Asia.
The central bank governor added that the Public-Private Committee discussed the fluctuation of yen on Monday and found that the yen has not appreciated significantly. It also viewed that earlier baht appreciation resulted from Thai exporters selling yen in advance and from the economic growth of Thailand and other Asian nations. However, the Bank of Thailand will continue to monitor the movements of the yen because Japanese companies in Thailand may send their money to help their mother companies in Japan. If that happens, the baht will become weaker, but if Thailand exports more products, the baht should be strong again. (TNA)
