Kittiratt slightly pleased with reduced policy interest rate

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BANGKOK, May 30 – Deputy Prime Minister/Finance Minister Kittiratt Na-Ranong said yesterday’s decision by the Monetary Policy Committee (MPC) to reduce the interest rate by 0.25 per cent was minimal but better than nothing.

He said the MPC’s resolution was rather slow but better than no action at all given the government’s repeated signals for a reduction of the policy interest rate in the last few months.

He said a delayed decision will have a negative impact on implementing the economic policy.

Mr Kittiratt said the Finance Ministry has facilitated the central bank’s control of foreign capital inflows by amending a ministerial order, which was officially announced and became effective as of yesterday.

The rewritten regulation authorises the Bank of Thailand to control capital volumes, exchange periods, capital inflows and outflows, and fee collections.

He said the baht has weakened against the dollar but remains strong against currencies of Thailand’s trading partners – an unfavourable situation that must be closely monitored.

Korn Chatikavanij, former finance minister and Democrat deputy leader, said reduced policy interest rate was as predicted and the 0.25 per cent decrease was appropriate.

He indicated that lower interest rate would not deter foreign capital inflows as foreign investors are still confident in Thailand’s financial stability and higher returns for their investment.