A roll-back of monetary policy by the Chinese authorities would not pull money from Thailand or force the government to raise the policy rate, Finance Ministry spokesman Ekniti Nitithanprapas said yesterday.
He said interest rates were just one factor influencing fund mobility, and so far there had been no irregularities in the baht exchange rate.
Moreover, Thailand is in a different context from China, where loan growth is as high as 40-50 per cent and property prices are at an exorbitant level.
“Thailand has no need to raise its interest rate. China, meanwhile, made the right move. It has witnessed significant loan growth and there are some signs of a property bubble. The higher rate will also help the global economy to contain the problem at home,”
Kasikorn Research Centre said it expected the Bank of Thailand's Monetary Policy Committee to maintain the policy rate at 1.25 per cent at the first 2010 meeting next Wednesday.
Though inflation is on the rise, the comparison is with the low base last year. Meanwhile, Thailand is undergoing several economic challenges, it said.
Yesterday, Chinese yuan forwards rose to the highest level in more than a month on speculation the central bank will resume appreciation of the currency this year as China’s exports rebound from a slump.
China signalled yesterday it is starting to unwind monetary stimulus measures to curb asset-price inflation, after the central bank sold three-month bills at higher interest rates for the first time in 19 weeks.