Pattaya Daily News

08 November 2008 :: 10:11:00 am 40656

Bot Chief Hints at Reducing Policy Interest Rate

BANGKOK, Nov 8 - Bank of Thailand (BoT) Governor Tarisa Watanagase on Friday hinted the central bank is ready to cut the policy interest rate if the country‘s economic risks increase.
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She said the bank was waiting to see the third-quarter real economic figures to be released by the National Economic and Social Development Board (NESDB) late this month.

Should the figures indicate clearly that the economic risks are gaining momentum, the Monetary Policy Committee is ready to reduce the policy interest rate.

The BoT chief said the bank had monitored the country’s economic conditions and found local factors remain unchanged from its earlier estimate.

However, the bank had begun to see worsening signals of external factors.

Mrs. Tarisa said how much the bank would relax its monetary policy depended mainly on the real situation of the Thai economy.

If the government successfully accelerates its budget disbursement, stimulates investment in the mega-projects and restores consumer spending, she said, both private investment and the demand for loans would increase.

In the past month, lending by commercial banks had risen by 3 per cent, demonstrating that domestic banks are willing to extend loans if they can.

“We have an opportunity to discuss with executives of commercial banks. They view large private firms, which used to count on offshore loans, may turn to seek loans in baht terms in Thailand because their costs of borrowing overseas are substantial.,” according to the central bank chief.

“In this circumstance, small- and medium-size clients may face greater difficulties in obtaining loans because large clients are competing to grab the liquidity,” she said. (TNA)

Reporter : PDN staff   Photo : Internet   Category : Thailand News

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