For the past few weeks the government has been “pressuring” the BOT to cut rates in the aim of preventing the Thai baht from getting any stronger. We’ve been against this thought as Thailand has so much liquidity flying around as it is and with the Government’s spending coming through next year any further rate cuts are unwarranted as GDP growth is fine, inflation is still there hovering just about 3% and we think any increase in liquidity could push things into a “bubble” state for the financial and property markets.
So well done BOT you’ve proven you have a spine!
The Bank of Thailand’s Monetary Policy Committee (MPC) has kept its benchmark interest rate unchanged at 2.75%.
The committee members on Wednesday afternoon voted six to one not to cut the policy interest rate because they believed the current rate was in line with the overall economic situation.
The MPC said the global economy was more stable and Thailand’s gross domestic product growth was higher than expected in the fourth quarter of 2012, while the inflation rate continued to increase because of fuel prices.
Source: Bangkok Post