BoT: Higher interest rates will not affect Thai economy

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BANGKOK, 25 April 2011 -The Bank of Thailand is confident higher interest rates will affect the manufacturing industry following the decision made by the Monetary Policy Committee. 

Bank of Thailand Deputy Governor for Monetary Stability, Atjana Waikwamdee said the new interest rates had consequently raised the costs of production. They account for 3-5% of the entire production costs. However, Ms Atjana said workers’s wage was also another reason why product prices had risen.

However, she added that despite more expensive cost of living, the interest rates help stabilize the inflation rates which could hamper the Thai economy. She further stated that the new increase would only have little impact to the industry.

Meanwhile, she showed no concerns over the strengthening of THB saying that every currency in this region was also in the same boat. A short term cash flow in the bond market since the beginning of this year was recorded at 100 billion US dollars, 4-5 times higher than the money going into the stock market. The Bank of Thailand will continue to monitor the foreign currency influx closely.