BoT: Interest rate not to be lowered yet

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BANGKOK, 24 September 2012 – The Governor of the Bank of Thailand (BoT) has confirmed that the interest rate will not be decreased in the near future while also saying that the Thai baht still remains stable. 

BoT Governor Prasarn Trairatvorakul indicated that there was an influx of foreign capital of up to 10 billion US dollars in the Thai stock and bond markets during the past 8 months. However, he said overseas investment of 8 billion baht has helped offset the impact of the influx and maintain stability of the Thai baht.

According to the central bank chief, the Monetary Policy Committee is keeping an eye on the global economy closely and will neither relax its fiscal policy nor reduce the interest rate any time soon. He reasoned that many commercial banks are trying to persuade customers to deposit more money so as to increase their lending capacity; therefore, the interest rate has to be retained.

Mr. Prasarn also cautioned that the US’s third quantitative easing (QE3) measure could affect the inflation rate, considering the soaring prices of some types of assets, such as gold and stocks.