BoT: Chinese interest rate hike not to affect Thailand

BANGKOK, 10 February 2011 – The Bank of Thailand (BoT) has confirmed that the interest rate hike in China will not affect the upcoming consideration of the monetary policy committee on policy interest rate.



BoT Monetary Policy Group Director Mathee Supapongse stated that the monetary policy committee will only take into consideration the domestic economic fundamentals, rather than incorporating factors from other countries.



The Chinese central bank on 8 February 2011 increased the interest rate by 0.25% in order to curb the spiraling inflation, triggering concerns that the BoT woud follow suit when the policy interest rate is considered on 9 March 2011.



Mr Mathee said the Chinese central bank had to take the action to prevent damages to its own economy. He noted that the Chinese economy would receive long-term benefits and grow in a more sustainable manner if the interest rate was gradually adjusted.



The director also admitted that the Thai export sector might receive some negative effects due to falling purchasing power following the higher capital cost. He however believed that the Chinese move should not affect Thai exports in the long run.



The BoT earlier projected that the Thai export sector will grow by about 11-14% this year.

(NNT : Sarun Saelee)

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