Bank of Thailand Governor Tarisa Watanagase on Monday said the bank was ready to count on using applied interest policy to stimulate the Thai economy now expected to be affected by the looming possibility of a United States economic recession and a consequent slowdown in Thai exports. (TNA)
Meanwhile, the same day, BOT assistant governor Duangmanee Vongpradhip said : “There is an opportunity for growth to reach nearly 4.5 per cent in 2008” (TNA)
So with an official growth forecast of 4,5 %, it would be necessary and urgent to cut interest rates to “stimulate the economy” ?
Talk about credibility. Once again, the BOT is running like a headless chicken.
The truth is : with a virtual pegg of the THB to the USD, the only obsession of the BOT is to follow the path of it’s big sister, the US FED.
The FED, in total panic mode, has cut last week. And will probably do it again today… The USD will continue to loose ground, putting a huge pressure on all the asian currencies.
Right now, no one is able in Thailand to think about an alternative path : they continue to run toward the cliff. With a smile.
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