The Bank of Thailand said Monday the central bank is ready to take monetary policy action to tackle high inflation and believes a rate hike will not hurt economic growth much, local media reported.
Tarisa Watanagase, the central bank's governor, told a press conference that the bank may have to increase the interest rate to reinforce market expectations. She said Any increase in the policy interest rate is unlikely to have a significant impact on spending or economic growth.
"Our real interest rate is negative, therefore if there is any hike in the policy interest rate, any affect on spending and economic growth won't be much," Tarisa was quoted by local news network The Nation as saying.
However, she ruled out calling an early meeting of the Monetary Policy Committee.
The next meeting is scheduled on July 16.
Meanwhile, the governor downplayed the chances of double-digit inflation this year. "It is possible that inflation may hit double digits in certain months but the chance is rather slim," she said.
Inflation of Thailand hit a decade high of 7.6 percent in May as record oil prices fed broad-based price increases.
Thailand's benchmark interest rate has been unchanged at a growth-accommodative 3.25 percent since August last year to support an economy battered by the political troubles which came after a military coup in September 2006.
Source: Xinhua
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