Economists, central bank disagree on baht measures | Bangkok Post: business

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Economists, central bank disagree on baht measures

The Bank of Thailand and some economists have conflicting ideas on the baht's direction and the means with which to rein in its appreciation.

Virabongsa Ramangkura, chairman of both the central bank and the government's water system investment committee, yesterday called on the Monetary Policy Committee (MPC) to cut the policy interest rate from the present 2.75%, saying the differential between local and US interest rates is too much.

Contrary to the central bank's views, he maintained the differential is a key factor in attracting foreign capital inflows.

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  • boons

    United StatesPost : 696

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    Discussion 1 : 31 Jan 2013 at 20.581

    The central bank cannot lower rates because their cost of capital will rise. The BoT is carrying a large amount of foreign denominated debt and a falling baht increases their debt burden.

    Economists can debate for as long as they wish and it will not change the selfish reasoning of the BoT. Business and SME's are paying for the government's debt.

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