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BoT anticipates inflation with interest rate hike

BUSINESS: The Monetary Policy Committee (MPC) of the Bank of Thailand has unanimously resolved to raise the policy interest rate from three to 3.25 per cent upon mounting concerns over the rising inflation.

Saturday 23 July 2011, 04:00AM

According to BoT Assistant Governor for Monetary Policy Group, Paiboon Kittisrikangwan, the MPC had a unanimous vote on Wednesday (July 13) to increase the key policy rate by another 0.25 per cent. The rate adjustment was aimed at maintaining the country’s economic stability and taming the inflation.

The MPC forecasted that the inflation rate would remain high as a consequence of the energy price hike and continuing price adjustment of ready-to-eat food.

Although the government measures to shoulder people’s cost of living have been extended, potential policies of the incoming government such as the minimum wage increase, plus its spending plan in the future are likely to drive the national inflation up.

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The policy interest rate has been raised for the sixth time in a row since December 1, 2010.

The rate hike was widely-expected. A survey of 18 economists by Reuters after the general election expected the BOT to raise the rate to 3.25 per cent, the highest since October 2008. They also expect further hikes, to as much as 3.75 per cent, by the end of this year.

– NNT/Phuket News



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