ASEAN KEY DESTINATIONS
Thai central bank raises interest rate
Inflationary pressure remains as domestic demand continues to expand. Meanwhile, fiscal stimulus poilicies could add price pressure and fuel inflation expectation despite softening in prices of oil and other commodities, said BOT assistant governor, Paiboon Kittisrikangwan.
The hike is the seventh in a row since October 2010.
Five of the MPC members voted for the increase, while two favoured a pause. The MPC will closely monitor the global economic condition and inflation and stand ready for policy adjustment to ensure economic stability, Paiboon said.
A majority of economists expected the hike, as domestic inflation is on the rise on continued spending. Despite growing external risks, mainly the economic outlook of the US and Europe, domestic spending remains resilient thanks to consumer confidence in political stability.
The central bank reached the decision despite notions from Finance Minister Thirachai Phuvanatnaranubala that a too high rate could hurt domestic confidence.
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