|
|
| • EXCH RATES |
|
Baht/$ 33.47/52
Bid/Ask
|
GOLD |
Closed
-
|
|
FINANCE
WICHIT CHANTANUSORNSIRI
The Finance Ministry stands ready to implement ''new measures'' to help spur growth and check inflation if monetary policies fail to show results, said Finance Minister Surapong Suebwonglee yesterday.
He said the ministry would closely monitor the impact higher interest rates would have on businesses and the public over the next several months.
''We will watch closely to see what impact the Monetary Policy Committee's interest rate hike will have,'' Dr Surapong said.
He declined to offer specifics on what measures the ministry would take if inflation continued to rise despite tighter monetary policy by the Bank of Thailand.
The central bank's MPC raised its one-day repurchase policy rate by a quarter-point to 3.5% on Wednesday, the first rate adjustment since mid-2007.
The MPC said in its statement that inflation risks have ''risen markedly'', and indicated that further rate hikes were possible to curb price rises.
But while raising interest rates to curb demand is a textbook response to inflation, the central bank's policy stance has drawn criticism from some business leaders and economists as a misunderstanding of the current situation.
Inflation is being driven by global increases in oil and food prices, critics say, not domestic demand. Raising interest rates will only increase costs for businesses and consumers, amplifying the impact of higher prices on finances.
While over the past several months Dr Surapong has been reluctant to criticise the central bank, Finance Ministry officials have been outspoken in their opposition to a rate hike.
But Dr Surapong yesterday, in his most pointed public comments on the debate, cited Nobel economics laureate Joseph Stiglitz as arguing that ''imported inflation'' from high oil prices could not be stemmed through higher interest rates.
''Using interest rates to check inflation must be done cautiously, as higher rates will have an impact on costs throughout the economy and result in slower growth,'' Dr Surapong said.
''This in turn could cause companies to fail and worsen the burden carried by the public.''
Inflation is currently running at a 10-year high at 8.9% last month, and could rise into double-digits over the next several months.
But some analysts now expect inflation to moderate in the second half, thanks to the 47-billion-baht anti-inflation programme announced by the cabinet on Tuesday.
The six-point package, which starts next month and ends in January 2009, includes excise tax cuts for diesel and gasohol, free bus rides for Bangkok residents, free train rides for upcountry commuters and free electricity and water for households that don't use much resources.
Prev
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Next
