Pattaya Daily News

10 November 2007 :: 12:11:49 pm 22923

30 Per Cent Reserve Requirement Still Necessary: Bank Of Thailand

BANGKOK, Nov 10 -- The 30 per cent capital reserve requirement imposed by the Bank of Thailand (BoT) last December to stem speculation in the Thai baht is still necessary to maintain due to currency volatility and huge foreign capital inflows into this country, said BoT governor Tarisa Watanagase.
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The central bank has no plan to waive the requirement as the currency is still moving in volatility and the BoT wants to monitor foreign capital inflows into the country in 2008 before taking any action, said Mrs. Tarisa.

The Thai baht has gained six per cent against the greenback since early November last year up till now and that is in line with other regional currencies including Singapore dollar, Malaysian ringgit and Chinese yuan while some currencies in the region have appreciated higher, she said.

Touching on the continued soaring oil prices in the world market, Mrs. Tarisa said concerned authorities would have to monitor the price movements closely as the impact would affect the US economy and Thailand which consumes largest oil in Asia.

Oil demand may fall if global oil prices soar sharply and countries would have to adjust their economies, she said.

Meanwhile, Prasarn Trairatvorakul, chief executive officer of Kasikornbank, said his bank had projected that if the Brent crude oil price in 2008 stay at US$77 a barrel, it would depress inflation in Thailand to rise to 2.5 per cent and gross domestic product (GDP) to grow to around 4.5-6 per cent.

In addition, if the Brent crude oil price rises to US$80 a barrel, Thailand’s GDP would decline to between 4-5.3 per cent while inflation would increase to 3.5 per cent and BoT’s interest rate policy would be affected as well, said Mr. Prasarn.

Reporter : PDN staff   Photo : PDN staff   Category : Business News

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