Finance foes square off on rate cut | Bangkok Post: business

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Finance foes square off on rate cut

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Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong lashed out at the Bank of Thailand's concern that an interest rate cut will fan inflation, calling it old-fashioned thinking, while former finance minister Korn Chatikavanij warned that such a rate cut would overheat the economy. 

Money supply is a factor leading to an inflation spike, rather than the interest rate, Mr Kittiratt said during a debate with Mr Korn.

A higher interest rate domestically than overseas is luring capital inflows to arbitrage spread, creating 10 billion baht a month in losses for the central bank to absorb the excessive liquidity, he said.

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