A 25-Basis Point Hike of the Thai One-Day Repo Rate
March 9, 2011
The Bank of Thailand’s Monetary Policy Committee voted unanimously to lift its key interest rate to 2.5% from 2.5% today. Earlier rate hikes of the same size were announced on January 12, December 1, August 25, and July 14, 2010. A released statement expects the spike in oil and other commodity prices to have a greater impact on inflation than economic growth and calls “a gradual normalization of rates appropriate for anchoring inflation expectations and reducing the risk of financial imbalances.” After contracting 2.3% in 2009, real GDP expanded 7.8% last year despite a slight dip in 3Q and by 5.8% between the final quarters of 2009 and 2010. Exports, consumption and business investment are each contributing positively to the steady and well-grounded upturn. Consumer price inflation, which is targeted to expanded 2.5-4.5% this year and by 2-4% in 2012, is currently at 2.9%, with a core rate of 1.5%, up from 1.3% in January. Officials continue to watch for signs of inflationary pressure. The next scheduled policy announcement is six weeks from today on April 20th.
Copyright Larry Greenberg 2011. All rights reserved. No secondary distribution without express permission.
Tags: Thailand
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