Thailand increases policy interest 25 bps to fight growing inflation

By Susanna Moon

Chicago, April 20 - The Monetary Policy Council of the Bank of Thailand said it voted six to one to raise its policy interest rate by 25 basis points to 2¾% at its meeting on Wednesday.

The council cited greater inflationary pressures amid economic growth as well as rising oil and commodity prices, according to a bank release.

The country continued to expand in the first quarter and is expected to maintain that momentum, the release said.

Corporate credit growth accelerated in line with the economic expansion, but there will likely be some slowdown in the production and export of automobiles and electronics due to the recent events in Japan, the bank said.

The bank said that demand has worked with rising production costs to push prices higher, which is reflected in inflation expectations.

The bank decided unanimously on March 9 to raise its policy interest rate by 25 bps to 2½%.

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

As already reported, the bank also raised its policy interest rate by 25 bps to 2¼% at its meeting on Jan. 12.

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