Kasikorn Research Center (KResearch) forecasts the Bank of Thailand (BOT) to peg the policy interest rate at 1.25%

BANGKOK, 21 August 2009 (NNT) – Kasikorn Research Center (KResearch) forecasts the Bank of Thailand (BOT) to peg the policy interest rate at 1.25% in the Monetary Policy Committee (MPC) meeting on August 26.

The MPC had maintained the policy interest rate at 1.25% in the past two meetings on May 20 and July 15. KResearch forecast that the MPC would peg the policy interest rate at this level in this meeting and the other two meetings in the rest of the year, because economic factors of Thailand remained risky, although the economic recovery had been seen in some sector.

The recovery would be gradually widened and stabilized in the next phase. Meanwhile the inflation was still low, therefore the BOT had no pressure from inflation to increase the policy interest rate in the rest of the year.

KResearch expected that the inflation in this year would be in the range of 0.4-0.9%, while the economic expansion in the second quarter of this year would shrink by 5.1% compared to the same period of last year. However, it would be the first positive growth rate of 2.3% in three quarters compared to the previous quarter, after the first quarter the economic expansion shrank 7.1% year on year, which was the worst figure in 10 years.