Wednesday, July 13, 2011

Bank of Thailand Lifts Interest Rate Another 25bps to 3.25%

The Bank of Thailand increased its benchmark 1-day bond repurchase rate by 25 basis points to 3.25% from 3.00%.  Bank of Thailand Assistant Governor, Mr. Paiboon Kittisrikangwan, said: "In light of the continued risks to inflation amid robust domestic demand, the MPC deemed it necessary to continue increasing the policy rate to maintain economic stability and anchor inflation expectations."  The Bank also said: "Inflationary pressure remained high due to elevated energy prices and continued upward adjustments in the prices of prepared foods."

The Bank of Thailand last increased the interest rate in June this year by 25 basis points to 3.00%, continuing a string of monetary policy tightening measures.  Thailand reported core inflation of 2.6% in June, up slightly from 2.48% in May, and 2.07% in April, according to the Commerce Ministry.  Headline inflation was 4.1% in June, compared to 4.19% in May, and 4.04% in April.  The Bank of Thailand has an inflation target range of 0.5% to 3.0%.

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