|
BANGKOK, THAILAND - THAILAND'S central bank on Wednesday hiked interest rates by a quarter-point to 3.50 per cent, making the first increase in two years in a bid to beat inflation down from a decade high.
Soaring prices for oil and food pushed Thai inflation to 8.9 per cent in June, the highest level since the 1997 Asian financial crisis.
'Now there are signals showing that rising production costs and high inflation are starting to affect confidence among consumers and investors, while also dampening exports by weakening Thailand's price competitiveness,' the bank's assistant governor Duangmanee Vongpradhip said.
'We think inflation will remain high and we may need to use tighter monetary policy to take care of it,' Ms Duangmanee told reporters.
'Increasing the central bank's policy rate will not have much effect on the private sector because it will help lower inflation in the future,' she added.
The increase had been widely expected and comes amid protests, sliding stock prices and other setbacks for the government.
Officials have already warned that inflation could reach double digits this month, suggesting more rate hikes are possible later this year. -- AFP
| 
