Thread: Thailand : Double Digit Inflation

Thai central bank chief concerned over rising inflation

BANGKOK, June 13 (TNA) – Bank of Thailand Governor Tarisa Watanagase on Friday voiced concerns regarding declining returns on savings and faster spending --rather than saving -- by consumers who in anticipation of higher inflation are buying now, stating that such action can push inflation to the double-digit level this year.

"Psychologically, if people think that the inflation rate will increase sharply, they will accelerate their spending. So, it is likely the inflation will surge to a double-digit level this year," she said.

Regarding a proposed reduction of the policy interest rate to stimulate the economy, she said such an action is impossible because the interest cut would boost the spending and so fuel the inflation rise.
"Reducing interest will encourage spending, which leads to a higher inflation rate. So, we can see almost all countries instead opting to raise interest rates," she said.

"In the United States, the Federal Reserve had previously cut key interest rates in a bid to stimulate the ailing economy, which was almost in recession at that time. Now, it begins to see a need to consider the interest hike to rein in higher inflationary pressures."

Mrs. Tarisa said the central bank is a sole agency responsible to oversee inflation. Accordingly, the bank must do its best to control inflation to boost consumer confidence. Otherwise, the inflation will surge incessantly.

The Commerce Ministry stated earlier that the consumer price index in May surged 7.6 per cent from the same month last year and 2.1 per cent from the previous month due to people's spending on education at the opening of new semester and higher transport costs upon the oil price hike. (TNA)

enews.mcot.net

The Bank of Thailand are meeting later to decide if they should raise interest rates or cut them.

^ The BOT wont toss a coin, they will go out into the countryside in a convoy of VIP coaches and have the police stop all the traffic along the way. When they arrive in the countryside they will study the bark on some trees to find lucky numbers that will guide them to their decision. after staying at an expensive resort overnight they will return to Bangkok and leave the rate unchanged.

I think we should be careful what we say from now on on this forum.

It is quite obvious that Spin is a cabinet minister.

I'm amazed they noticed.