BANGKOK, 21 April 2011 – The Monetary Policy Committee (MPC) of the Bank of Thailand (BoT) has resolved to increase the policy interest rate by 0.25% from 2.50% to 2.75% upon mounting concerns over the rising inflation.
BoT Assistant Governor for Monetary Policy Group Paiboon Kittisrikangwan announced that the MPC had a majority vote of 6-1 to increase the policy interest rate with immediate effect. He said the MPC will keep a close eye on pressure to the inflation in order to implement appropriate policies.
The MPC at their meeting on Wednesday observed that the global economy was expanding well. The US was recovering continuously with improving employment and consumer spending while the EU economy was gradually growing despite a risk factor in public debt crisis.
The report said Asian economy was strengthening despite some hiccups after the twin disasters in Japan and their impacts on production. Many countries in the region were facing with rising inflation following expensive oil and product prices, leading to tighter monetary policies used to tame inflation.
The MPC viewed that the Thai economy in the first quarter was expanding well with rising domestic and foreign demands. Business loans had been growing up in line with the economic expansion; however, the twin disasters in Japan would partially affect auto and electronics industries.
The MPC viewed that inflationary pressure was increasing owing to the continuous expansion of demand plus expensive oil and product prices. Despite the government’s efforts to regulate price hike, gradual price adjustments of various products would keep boosting the inflationary pressure.