June 4, 2008
Bangkok - Thai commercial banks had to raise their interest rates as the inflation rate reached 7.6%.
Siam Commercial Bank raised 1% and 1.25% of its 24 and 36-month fixed deposit interest while the loan interest rate hiked 0.375%.
Bank of Ayudhya (BAY) will call a meeting to consider the interest rate hikes within this week.
Bangkok Bank previously raised both the deposit and loan interest rates.
It was the first time big banks have raised their interest rates since the end of 2004, according to the Thai Farmers Research Center (TFRC).
More banks are expected to follow the rate rise. The situation reflects the interest upturn has begun though the Central Bank maintained its rate at 3.25%.
Ajana Waikwamdee, Deputy Bank of Thailand (BoT) Governor on fiscal policy, admitted May’s inflation was higher than expected.
BoT expected the inflation rate would be 7.3%. However, commerce ministry announced the 7.6% rate instead.
“The two-digit inflation rate should not come yet though many parties express their concerns over the issue. But it is not known how far the oil prices will go. The inflation will be re-estimated on July 28,” said Ajana.
