” The Monetary Policy Committee decided to keep the policy interest rate at 3.25 per cent per annum“.
It’s not a surprise (3,25 % since july 2007).
“In the first two months of this year, domestic demand continued to expand, from both private consumption and private investment. At the same time, the government’s budget disbursement met its target. Exports continued to expand well, but the slowdown in the global economy could affect export growth going forward.
Risks to inflation increased from the previous meeting. Headline inflation accelerated in the first quarter due to the prices of oil and commodities in world markets, as well as greater pass-through of costs to domestic prices. However, the MPC assessed that these pressures were likely to moderate in the latter part of the year in tandem with the slowdown of the global economy. ” (official statement)
I love those official statements. “Risks of inflation” ? Sweet. At that point, it’s not risks. Inflation is here.
As for the “likely to moderate” in the second semester… it would be just technical. The growth of inflation rate will indeed decrease (because of the base effect)… but that doesn’t mean that the prices are going to decrease (chart here). And to this point, there is not proof that the current slowdown has an effect on cost inflation (oil, agriculture products, and other raw materials).
The push of the prices we had and that we continue to have… will continue to pressurize common people.
And 2 months and 10 days ago, Tarisa (BOT governor) 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“.
So stimulation ? No stimulation ? Growth or recession ? Inflation ? No inflation ? That’s the good point with thai authorities : you can find a little bit of EVERYTHING in their statements. 
The BOT, like many other central banks in the world, is just paralyzed. They don’t know what to do and where they’re going.
[next meeting of the MPC : 29 may]
0 Responses to “Interest rates : BOT on hold at 3,25 %”