By Payungasak Wiriyabunditkul
BANGKOK-The Bank of Thailand should focus more on the exchange rate
than inflation as the policy of setting price-rise targets may no
longer be appropriate, the bank's Chairman Virabongsa Ramangura said
Tuesday.
Monetary policy should aim mainly at supporting economic growth and
employment instead of controlling inflation, he said.
Mr. Virabongsa said that the major source of instability for small
economies, like Thailand, is a fluctuating exchange rate, driven by
volatile capital flows, which the bank should use monetary tools to
deal with.
"Should there be too many inflows and we want them to slow, then we
can cut the interest rate, but should we want to attract more inflow,
we can just raise the rate," he told reporters on the sideline of a
dinner talk in Bangkok.
Despite the chairman's comment, any decision to shift monetary policy
focus rest with the bank's seven-seat Monetary Policy Committee, of
which Virabongsa is not a member.
Write to Payungsak Wiriyabunditkul at payungsak.wiriyabuditkul@dowjones.com
(END) Dow Jones Newswires
August 07, 2012 11:52 ET (15:52 GMT)
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