BOT's reduced key interest rate not seriously affect inflation

BANGKOK, June 3 (TNA) - The Ministry of Commerce says that the Bank of Thailand (BOT)'s cut in its key interest rate recently, from 2.75 per cent to 2.50 per cent, has slightly affected the country's inflation. Permanent Secretary for Commerce Vatchari Vimooktayon told journalists on Monday that the BOT's 0.25-per cent-cut in its policy interest rate, or repurchase rate, should increase Thailand's inflation slightly by 0.0025 per cent. Vatchari pointed out that Thailand's inflation was up by 2.27 per cent in May 2013, a slowdown compared with the corresponding period of last year, noting that last month's increased inflation resulted mainly from the rising prices of food and non-alcoholic beverages. According to the senior official, the prices of vegetables and fruits rose by 4.39 per cent year-on-year in May due to weather fluctuations, while the prices of chicken eggs increased by 8.79 per cent year-on-year due to rising costs and high temperatures, causing a short supply of chicken eggs. The senior Commerce Ministry official reported that inflation stood at 2.8 per cent year-on-year on average in the first five months of this year as expected by her ministry, resulting from the declining world oil prices and the Thai government’s control on the prices of energy and products. The Commerce Ministry predicted that Thailand's inflation should run around 2.80-3.40 per cent throughout this year, as earlier estimated. The Commerce Ministry assessed that the rising prices of chicken eggs should be short-lived and the prices of vegetables and meat should not further rise, as the ongoing rainy season in Thailand is cooling down the weather and yields should, thus, increase. (TNA)