Thai central bank holds rates as economy shows signs of life

A Thai bank employee counts bundles of T

Thailand’s central bank held its key interest rate on Wednesday (Aug 6) as the kingdom’s economy showed signs of revival after an army coup ended months of political protest which rattled consumers, tourists and investors.

The Bank of Thailand kept its policy rate at 2.00 per cent, a level set in March in an effort to boost an economy which shrank 2.1 per cent quarter-on-quarter in the first three months of 2014.

The economy had since shown “signs of improvements … from private spending following the political resolution,” said Paiboon Kittisrikangwan, Secretary of the Monetary Policy Committee (MPC). Explaining the decision, he said the bank expected stronger domestic demand in the second half of the year as “fiscal policy, particularly public investment, should lend further growth recovery” while exports including tourism are also expected to recover, albeit slowly.

It was the bank’s second monetary policy decision since the army toppled a civilian government whose spending plans were hamstrung by months of political turmoil.

Thailand’s army seized power from the elected government on May 22, pledging to galvanise the kingdom’s stuttering economy. It has promised to make swift decisions on much-needed major infrastructure projects and has moved to reassure tourists the kingdom is once again safe to visit after violence linked to the protests claimed nearly 30 lives and wounded hundreds more.

An appointed national assembly will be convened for the first time tomorrow, opening the way for the selection of a new prime minister who will marshall economic policy.

Analysts said the bank’s expected rate hold reflected fragile economic gains since the army power grab. “With the economy still in a delicate state, the Bank of Thailand will be keen to keep rates low,” Capital Economics said in a briefing note. “But as the economy gains a stronger footing in 2015, supported by public spending, we expect the BoT to gradually tighten monetary policy.”

 

 

Source : Channel News Asia | August 6, 2014

Thomas D’Innocenzi

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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