Central bank governor does not expect interest rate hike

BANGKOK, Feb 22 (TNA) -- Thai interest rate does not have to rise along with the rate of the United States, said Veerathai Santiprabhob, governor of the Bank of Thailand, while warning of financial fluctuations this year. In the seminar on “Credit Spotlight On Thailand The link To Continental Southeast Asia” organised by TRIS Rating Co and S&P Global Rating, Mr Veerathai said that worldwide money and equity markets experienced plunges in the past month due to unexpectedly negative economic figures from the US. The fluctuations would continue and markets’ perceptions might not reflect real economic situations. Therefore, investors would have to take precautions and properly manage their risks concerning foreign exchange rates and economic costs, he said. He said that if US inflation runs fast, the Federal Reserve may raise its policy rate quickly. However, he does not think that the Thai policy rate will have to follow suit because monetary policies must support national economic growth and Thai inflation remains slow. High liquidity in the country could cope with some capital outflows, Mr Veerathai said. The Thai economy was strong enough to cope with fluctuations in global economic situations because Thailand’s foreign debt amounted to only 36% of the gross domestic product, the current account surplus equaled 10.8% of the GDP, Thailand’s foreign exchange reserves were four times as much as its foreign debts, and its financial institutions were strong, Mr Veerathai said. However, he said he was closely monitoring the situations of small and medium-sized enterprises. (TNA)