April 10, 2008
Bangkok - The Central Bank decided to leave interest rates unchanged at 3.25 percent on Wednesday, noting the risk of rising inflation but saying the danger would soon pass, according to AFP.
The bank has held rates steady since August last year.
"Risks to inflation increased from the previous meeting," Duangmanee Vongpradip, the Bank of Thailand's assistant governor for monetary policy, said in a statement.
"Headline inflation accelerated in the first quarter due to the prices of oil and commodities in world markets as well as greater pass-through of costs to domestic prices," she said.
"These pressures were likely to moderate in the latter part of the year in tandem with the slowdown of the global economy," she added.
Inflation was at 5.0 percent in the first quarter of the year.
Duangmanee said that improved domestic demand was helping Thailand's economy, encouraged by stimulus packages under the new government that took office in February.
She also warned that while exports are growing, a slowdown in the global economy could affect export growth later in the year.
Exports account for 60 percent of Thailand's economy. The kingdom is the world's biggest exporter of rice and also a major producer of cars, textiles, electrical appliances, fruit and shrimp.
