Thai central bank keeps key interest rate unchanged

BANGKOK, Dec 2 (TNA) – Thailand’s central bank on Wednesday kept its policy interest rate unchanged at 1.25 per cent, saying the current rate is “appropriate and supportive of the economic recovery”.

Bank of Thailand (BoT) Assistant Governor Paiboon Kittisrikangwan said the Thai economy continued to recover at a slightly slower pace in the third quarter and October boosted by improvements in domestic and foreign order books, business sentiment, farm income, employment conditions as well as the tourism  sector.

As a result, the BoT Monetary Policy Committee (MPC) agreed that gradual economic recovery still “requires sustained policy support.”

The major industrialised and Asian economies expanded in the third quarter at higher rates than market expectations but overall recovery remains dependent on policy support.

Current global inflationary pressure continues to be subdued, but risks to global economic recovery remain and warrant continued close monitoring, Mr Paiboon said.

Raising the interest rate in other countries depends on their economies and is not caused by the Dubai World crisis, the senior bank official said, noting that it has no impact on Thailand, in similar status as the recent devaluation of Vietnamese dong.

Speaking about worries regarding the real estate bubble in several countries such as South Korea, Hong Kong and Singapore, the Monetary Police Committee, Mr Paiboon said, has seen no sign of a bubble in the Thai real estate sector and the stock market.

The BoT will closely monitor the inflation, which rose 1.9 per cent in November due to increasing fuel prices while core inflation remains close to zero. The senior central bank official said the inflation rate is likely to increase in December owing to rising oil prices. (TNA)