Wednesday, March 21, 2012

Bank of Thailand Holds Interest Rate at 3.00%

The Bank of Thailand held its benchmark 1-day bond repurchase rate unchanged at 3.00%.  Bank of Thailand Assistant Governor, Mr. Paiboon Kittisrikangwan, said: "The MPC assessed that the risks from the global economy had decreased and that the recovery in the Thai economy was gaining momentum. At the same time, inflationary pressure had edged up. In this context, the MPC deemed  the current level of the policy rate to be appropriate in supporting economic recovery while still consistent with keeping inflation within target. The MPC, therefore, voted unanimously to maintain the policy rate at 3.00 percent per annum at this meeting."

The Bank of Thailand previously cut the rate 25bps in January and at its December meeting, and previously raised the rate to 3.50% at its August meeting, and increased the interest rate in July last year by 25 basis points to 3.25%.  Thailand reported headline inflation of 3.6% in December, down from 4.29% in August, 4.08% in July, 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%.  

The Thai economy grew 0.5% in the third quarter, after 0% growth in the June quarter, and 2% in the March quarter, placing annual GDP growth at 3.5% (2.7% in June, and 3.2% in the March quarter).  The Thai baht (THB) has weakened about 2% against the US dollar over the past year, while the USDTHB exchange rate last traded around 30.8


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