MPC maintains rate at 3%

"The 3-per-cent policy rate is an appropriate level to support the country's economic recovery and keep inflation in check," said Paiboon Kittisrikangwan, the central bank's assistant governor and secretary to the MPC.

Bank of Thailand Governor Prasarn Trairatvorakul recently insisted that the policy rate would not be raised. He said that inflation is under control, but what concerns him is high inflation expectation among business operators and consumers following the higher oil prices and higher minimum wage.

The rate will stay despite improvement in economic outlook, which may lead to higher inflation. While risks from global economy soften, Thailand's economy is on the recovery track.

At the meeting, the MPC also revised up its economic growth estimate to 5.7 per cent for 2012 from the previous projection of 4.9 per cent.  The National Economic and Social Development Board recently jacked up the projection to 5.5-6.5 per cent.

The MPC also revised up its projection for headline inflation to 3.4 per cent for 2012 from the previous forecast of 3.2 per cent. Core inflation is expected to be 2.4 per cent this year from the previous estimate of 2.2 per cent.

Paiboon also added that the recovery is witnessed in all sectors and the manufacturing sector is expected to stage a full recovery by the third quarter of this year.