Policy rate maintained at 3 per cent

“The MPC assessed that the recent easing in monetary policy has helped to boost business confidence and restore the country’s recovery, which has been faster than expected. Meanwhile, inflation is at the manageable level," said Paiboon Kittisrikangwan, assistant governor and secretary to the MPC.

However, the MPC is still concerned about persistent risks, particularly external ones, Paiboon said. Chief among them was the fact that the Euro zone is sliding into recession and will take time to resolve its structural problems.

The MPC had been widely expected to maintain the policy rate at today’s meeting. Inflation in April eased, rising only 2.47 per cent, after a sharp increase in the first three months of this year. This brought the 4-month inflation to 3.16 per cent, well below the 4-5 per cent target.

 

Kampon Adireksombat, senior economist at Tisco Economic Strategy Unit, said it is likely that the policy rate may be hiked in the last quarter, as inflation could quicken on faster-than-expected recovery in domestic demand.
 At this moment, the house expects the policy rate to remain at 3 per cent until the end of this year.
 Picha Ratanatam, Tisco Bank's head of wealth management, advised investors to focus more on short-term investment (1 year of maturity of less) to take advantage of the upward interest trend.