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.
China’s new three-child policy highlights risks of aging across emerging Asia
Thailand’s (Baa1 stable) total dependency ratio is set to jump nine percentage points to 51% by 2030 – a faster increase than China’s – which will pressure public and private savings through higher taxes and social spending, reducing innovation and productivity gains.
Population aging in China (A1 stable) and other emerging markets in Asia will hurt economic growth, competitiveness and fiscal revenue, unless productivity gains accelerate, according to a new report by Moody’s Investors Service.(more…)
Clear skies over Asia’s new foreign investment landscape?
Compounding the fallout of the US–China trade war, the global pandemic and recession have caused considerable speculation on the future of foreign investment and global value chains (GVCs). But though there is likely to be some permanent change, it will probably not be as great as politicians expect.(more…)
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