BoT to peg RP rate until the end of 2010

BANGKOK, 16 June 2010 (NNT) — The Bank of Thailand (BoT) will peg the RP rate at 1.25% until the end of this year, following the requests of the private sector.

After meeting with delegates from the private sector, BoT governor Tarisa Wattanagase and other senior executives are to discuss the direction of the interest rates. Vice Chairman of the Thai Chamber of Commerce, Pongsak Assakul said that the interest rate hike is gradual, due to concerns of inflation. Even though the inflation rate in Thailand is lower than other countries, the BoT needs to make a pre-emptive move beforehand to prepare, said Mr Pongsak.

Meanwhile BoT assures that the Thai economy will expand and this will lessen the need to suppress the interest rates. According to the BoT, this is following the improvements of the world economy. However the BoT has affirmed that they will closely stabilize the currency value and the interest rates to prevent any interferences to the business sector.

Chairman of the Federation of Thai Industries (FTI) Santi Vilassakdanon said that investments are expected to be stimulated after improvements from the economic recovery, even though it will take awhile. The basic foundation of the Thai economy is strong due to exports, Mr Santi said. He added that this will help expand the economy, stimulating jobs and exports in agriculture. The above factors will help boost foreign confidence and help stabilize foreign investments in Thailand, Mr Santi said.