PM Abhisit warns of impact of policy interest rate hike


Prime Minister Abhisit Vejjajiva on Thursday warned of impacts from the central bank’s policy interest rate hike, saying it could dampen the country’s economic expansion.

Commenting on the decision by the Bank of Thailand (BoT) Monetary Policy Committee to raise the short-term repurchase rate by 25 basis points at its meeting Wednesday, he said it was at the bank’s discretion to do that.

However, he revealed that the issue was raised for discussion at the meeting of economic ministers in which he suggested the interest rate policy be implemented with caution since the economy seemed to be growing at a slower pace.

Under the current circumstances, he thought all parties concerned must help to maintain the country’s economic recovery.

“I want state agencies concerned to monitor impacts, particularly of currency exchange rate volatilities and capital inflows, on the economic growth rate” he said.

The issue is widely discussed because the central bank always affirmed the policy interest movement won’t encourage the capital inflows, but the government previously commented that the bank must implement the policy with caution to ensure it will not affect the economic recovery.

“It depends on the bank’s discretion as it has full authority in this matter,” said the premier. (MCOT online news)