Bank of Thailand faces tough rates decision

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MPC in the hot seat over rate decision

BoT panel faces backlash whether it cuts, stays put

Published: 20 Feb 2013 at 01.03
Online news: Politics

The Bank of Thailand's Monetary Policy Committee (MPC) will be in the hot seat when it meets Wednesday to decide whether to cut the policy interest rate.

The government has been applying pressure on the central bank to slash the rate to curb the influx of capital inflows from overseas.

Critics say the Finance Ministry's recent written request for the MPC to bring down the rate amounts to political interference in the BoT's affairs.

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DickFarang
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Discussion 12 : 20 Feb 2013 at 14.0412
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@ Discussion 7 (pjt):

Very good idea.
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DickFarang
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Discussion 11 : 20 Feb 2013 at 13.3711
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@ Discussion 6 (tomb):

History learns that in general small cuts of 0.25 % have no effect at all.

What is needed is a “bazooka”.
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DickFarang
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Discussion 10 : 20 Feb 2013 at 13.2910
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I always find funny when somebody claims that the unemployment rate in Thailand is only 1 %.

Where do they get this information from ?

Taken out of thin air ?

Personally I think it is over 50 %.

It all depends on the criterion for “employment”.
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Eric
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Discussion 9 : 20 Feb 2013 at 11.079
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My bet is that the BOT will let rate maintained. Kittiratt will not made too much fuzz about BOT decision. He is a pragmatic and experience man and the reality is that the economic is strong and employment full that need not necessitate a rate cut. Inflation risk is a more serious concern and rate cut will attract real estate bubble. Moreover the exchange rate has stabilized last few days. Rate to stay.
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facts_only
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Discussion 8 : 20 Feb 2013 at 10.598
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whatajoke 1, the 1997 Crises was caused by removing the baht's peg of 25 baht to the dollar when the market value was ~60 baht/dollar. The article above explains how an policy interest rate may be reduced by ~0.25%.

See article, "Rate cut seen as unlikely despite strong baht" by TN, February 20, 2013, for specific details.
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pjt
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Discussion 7 : 20 Feb 2013 at 09.487
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What would be helpful is for the MPC to publish the movement in the baht against the basket of currencies in which we trade - this is usually weighted by the volume of trade in each currency. That gives a much better idea of the real impact and trend of movement. BTW there are readily available forward exchange cover tools to mitigate the impact of short term exchange fluctuations. These are well know to large enterprises - perhaps an education programme for SME's who export or import would help
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tomb
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Discussion 6 : 20 Feb 2013 at 09.126
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A small rate cut of 0.25 per cent seems the best way out.
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hillfarang
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Discussion 5 : 20 Feb 2013 at 08.235
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"The government wants the rate to be cut to slow capital inflows which have caused the baht to strengthen, thus hurting the competitiveness of Thai exports."

Balance is important, but this is not a "one-way" street. A strong baht means cheaper oil & other imports (energy) & means that Thai salary earners will have more clout when they go abroad as well.

The key is finding the level that can be relatively stable for long-term business planning.
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Contrarian
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Discussion 4 : 20 Feb 2013 at 08.194
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Disc. #1..."...... isn't this how the '97 crisis escalated.

Exactly.

And I wouldn't put it past the PAD-Dem Opposition to create such conditions again, for obvious self-serving reasons. All power-seeking options, including coup's, are fair game when one is in a Non-electability condition.

What some call "Populist policies" is often code for "Non-elite serving Policies". When it comes to monitary matters, the elite's objectives are not the same as that of the electoral constituancy of the PTP/Ms. Y. Hence you see them and their friends fulminating, as demonstrated in this article and projected via the Abhisit/Korn types.
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Ian
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Discussion 3 : 20 Feb 2013 at 07.543
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Why the fuss, a suggestion is not an order?
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Bank of Thailand faces tough rates decision | Bangkok Post: news

MPC in the hot seat over rate decision

BoT panel faces backlash whether it cuts, stays put

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