Thailand lifts policy interest rate by 25 bps amid spike in oil prices

By Susanna Moon

Chicago, March 9 - The Monetary Policy Council of the Bank of Thailand said it decided unanimously to raise its policy interest rate by 25 basis points to 2½% at its meeting on Wednesday.

The council noted that the spike in oil and commodity prices has resulted in greater inflationary pressure since its last meeting.

"Gradual normalization of the policy rate remains appropriate for anchoring inflationary expectations and reducing the risk of financial imbalances in the economy," according to a bank press release.

The council said it will watch inflation closely and is ready to take any needed action.

The outlook is better for the U.S. economy due to more consumption, recovery in private-sector employment and a falling unemployment rate, and the European economy has expanded gradually, the release noted.

Asian economies meanwhile are growing "robustly," supported by rising domestic demand and exports.

As for the political unrest in the Middle East, the bank said that unless it becomes widespread and affects global oil supply, the spike in oil and commodity prices will unlikely affect the global recovery.

The bank raised its policy interest rate by 25 bps to 2¼% at its meeting on Jan. 12.

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