Thailand’s One-Day Repo Rate Hiked to 2.25% from 2.0% as Expected
January 12, 2011
Thai monetary officials implemented the fourth interest rate increase in five meetings, lifting such to 2.25% from a cyclical low of 1.25% prior to mid-2010. Policymakers met previously on December 1 and do not hold another meeting until March 9. A lull in growth during the third quarter of last year proved brief, and Thailand is back near its long-term trend. Exports and tourism revenues were better than expected last quarter. Income and jobs are rising, and high capacity usage will provide an additional impulse for growth. A statement from the Bank of Thailand today also noted diminishing global economic risks but, more importantly, projected rising headline and core price pressures due to elevated commodity prices and demand-pull strains. Consumer prices rose 3.0% in the year to December, GDP growth hovered near 7.0% last year, and unemployment is below 1%. Rates will need to be raised additionally before normalization is completed.
Copyright Larry Greenberg 2011. All rights reserved. No secondary distribution without express permission.
Tags: Bank of Thailand
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