Higher interest rate is not needed in the next 3 months

BANGKOK, 4 November 2009 (NNT) – The Bank of Thailand (BoT) reported that Thailand’s economy was still in a secure position although inflation had rocketed to 0.4% in October. BoT expected no higher interest rate in the next 3 months as the economic stimulus plan was ongoing.

Senior Director of Domestic Economy Department, Suchart Sakkankosone, stated that the rise by 0.4% of inflation in October 2009, which was the first time the rate had turned positive after the past nine months in the negative zone, was a minor factor to affect the national interest rate. He said that even though the government’s policy to assist people was canceled, the inflation rate would still be in the range of 0.5-3.0%.

Mr Suchart added that the fluctuation of the interest rate in the next three months would not mainly depend on the rise in inflation. Low interest rate was yet deemed necessary in upholding the business sector and the national economy. Therefore, a higher interest rate was not needed at present, he viewed.

The Director also estimated that the increasing oil prices would not have much influence to the national inflation. He expected that the current oil prices of 75 USD a barrel would touch the average price of 80 USD per barrel by next year.

The BoT however believed that Thai economy would gradually recover in the fourth quarter of this year as several price indices showed a continuous improvement.