Somkid assures Thai financial institutions are strong

BANGKOK, March 18 (TNA) -- Despite fluctuations in international money markets, Deputy Prime Minister Somkid Jatusripitak has assured that Thai financial institutions are strong. Mr Somkid who oversees economic affairs said that the US Federal Reserve raised its repurchase rate once this year to control inflation because it expected economic recovery but the rise caused fluctuations in money markets, especially emerging ones, and resulted in financial problems in many countries. However, such concerns did not reach Thailand because Thai financial institutions had learned their lessons from the 1997 economic crisis and were taking precautions in their lending, he said. Mr Somkid also said that Japan and the European Central Bank were among many parties using negative interest rates to prompt commercial banks to lend to investors. Besides, the ECB is injecting US$80 billion into economies per month. Under the situation, funds would flow to local and overseas investment projects and Thailand should be prepared to receive the money, he said. He also said that China was cutting its noncompetitive and labour-intensive industries and turning to innovative and high-technology industries. That would leave about two million people jobless but a few years after China solved its over-capacity problem, its economy would grow faster, Mr Somkid said. China expected its economy would grow 6-7% without economic stimulation. "Many countries must consider the economic shift in China carefully because China is undergoing a reform. Export from countries is weaker because of the lower purchasing power of China. So, the trading partners of China must shift from growth from export to growth from within. This is the reason why the government is speeding up local investment, preparing money and distributing it as planned," Mr Somkid said. (TNA)