TEXT-Bank of Thailand raises rates by 25 bps to 2.50 pct

Wed Mar 9, 2011 1:16pm IST

 BANGKOK, March 9 (Reuters) - Following is the text of a
statement from Thailand's central bank after it raised its
benchmark interest rate by 25 basis points to 2.50 percent on
Wednesday, as expected.
 TEXT: The outcome of the Monetary Policy Committee (MPC)
meeting today, as follows:
 The global economy maintained its growth momentum. The
outlook for the US economy improved from the previous MPC
meeting due to increased consumption, recovery in private
sector employment, and a declining unemployment rate.
 The European economy expanded gradually, with core
countries serving as the main growth engines. Meanwhile, Asian
economies continue to grow robustly, supported by rising
domestic demand and exports.
 The MPC viewed that unless political unrest in the Middle
East becomes widespread and affects global oil supply, the
current spike in oil and commodity prices will not
significantly impact the continuity of global recovery.
 The Thai economy continues to expand steadily, supported by
expansion in exports, private consumption and private
investment as well as fiscal stimulus. Private consumption
growth continues to be supported by high farm income and
improving employment.
 Private investment is underpinned by rising manufacturing
production and business confidence. In light of these
relatively strong fundamentals, the MPC evaluated that the
current surge in oil and commodity prices would not weigh on
the growth prospects of the Thai economy.
 The surge in oil and commodity prices has resulted in
increased inflationary pressure compared to the previous MPC
meeting. Nevertheless, the MPC assessed that gradual
normalisation of the policy rate remains appropriate for
anchoring inflationary expectations and reducing the risk of
financial imbalances in the economy.
 The MPC therefore decided unanimously to raise the policy
interest rate by 0.25 percentage point from 2.25 to 2.50
percent, effective immediately.
 The MPC will, however, closely monitor inflationary
pressure going forward and stands ready to take necessary
action.
 (Reporting by Orathai Sriring)