Rate on upward trend: Prasarn
Bank of Thailand Governor Prasarn Trairatvorakul reiterated that the interest rates are on the upward trend, despite the urge from politicians and some economists for lower rates to help speed up the economic recovery.
Saying at a "Thailand Smart Money" seminar today, he declined to pinpoint the magnitude of the increase. He simply noted that it would be in line with the economic condition, which will be under great pressure from the eurozone crisis.
While dismissing the possibility of the euro breakup, he said that the euro portion in the foreign reserves has been cut while gold investment has slightly exceeded 3 per cent.
On the euro breakup, he said that would send a contagion effect to the world and that should encourage several European countries and the International Monetary Fund to come up with relief measures.
He also assured all that Thai financial institutions are now functioning as usual, despite credit crunch in Europe and the severe flooding. At present, liquidity is as high as Bt4.7 trillion.
He supported banks' forecast that loans next year would expand nearly 10 per cent, compared to 17-18 per cent this year, due to demand for rehabilitation.
