POLICY RATE

POLICY RATE

BOT hikes rate by 25bps

The Bank of Thailand's Monetary Policy Committee decided to raise the policy rate by 25 basis points to 3.50 per cent in its meeting today, citing heightened inflation risks as the reason.
Inflationary pressure remains as domestic demand continues to expand. Meanwhile, fiscal stimulus poilicies could add price pressure and fuel inflation expectation despite softening in prices of oil and other commodities, said BOT assistant governor, Paiboon Kittisrikangwan.

The hike is the seventh in a
Five of the MPC members voted for the increase, while two favoured a pause.
The MPC will closely monitor the global economic condition and inflation and stand ready for policy adjustment to ensure economic stability, Paiboon said.
row after a pause in October 2010.
A majority of economists expected the hike, as domestic inflation is on the rise on continued spending. Despite growing external risks, mainly the economic outlook of the US and Europe, domestic spending remains resilient thanks to consumer confidence in political stability.

The central bank reached the decision despite notions from Finance Minister Thirachai Phuvanatnaranubala that a too high rate could hurt domestic confidence.