October 9, 2008
BANGKOK (AFP) - The Bank of Thailand on Wednesday left interest rates unchanged at 3.75 percent, as inflation in the kingdom dropped on the back of a global fall in oil prices, a bank official said.
"The risk of inflationary pressure has sharply dropped when compared to our previous meeting because oil prices dropped," said bank deputy governor Duangmanee Vongpradhip.
"The (committee) decided to maintain the interest rate at 3.75 percent."
Inflation soared to a 10-year-high of 9.2 percent in July prompting the Bank of Thailand to raise interest rates by 25 basis points in August. Inflation has since gradually eased and was 6.0 percent last month.
However, Duangmanee warned that the financial crisis currently gripping the world and political turmoil in Thailand could hurt the economy.
Police and anti-government protesters clashed in Bangkok on Tuesday, with two dead and hundreds injured as months of political turmoil boiled over into violence.
"The risk that economic expansion will slow is increasing from the impact of the global financial crisis and local political turmoil," she said.
Thailand's stock market has lost nearly 40 percent since late May, when a protest group launched its campaign to bring down the elected government.
