Interest rate policy still unnecessary

BANGKOK, 22 December 2009 (NNT) — The Bank of Thailand is closely monitoring the economic situation to see if the interest rate policy is necessary to curb inflation.

The Governor of the Bank of Thailand, Ms Tarisa Watanagase, said that to prolong the low-interest rate policy would raise two points of concern, which are, a hike in inflation rates and the economic bubble.

Ms Tarisa stated that the Monetary Policy Committee needs to check if the inflation rate is within the set target. She noted that an increase in inflation didn’t mean that the interest rate would have to rise accordingly.

Ms Tarisa added that the intensity of the growth is up to government stimulations which will pave ways for the private sector to pick up. One example is the enforcement of the Thai Khem Kaeng’ stimulus package (SP2) that includes injecting trillions of THB into the Thai economy.

The Bank of Thailand hoped the SP2 would help accelerate the manufacturing sector in the long run so that the Ministry of Finance would be able to collect more tax to pay for higher public debts.

Ms Tharisa added that the Thai economy is heading towards a positive direction due to an increase in domestic spending and a better world economy.