BUSINESS NEWS:
Thai foreign ministry instructs embassies & consulates to clarify with int’l community
The Thai foreign ministry has promptly instructed all embassies and consulates to clarify the local political turmoil with the international community.
Foreign Minister, Tej Bunnag, admitted People’s Alliance for Democracy-led anti-government protests on Tuesday could pose some negative effects on Thailand’s tourism and economic conditions.
Thousands of protesters broke into and occupied state broadcaster NBT, Government House and several ministries yesterday in what claimed to be their major rallies to oust the Samak Sundaravej administration.
Tej said he has already instructed all Thai embassies and consulates across the world to clarify the situation with all countries and to explain that the demonstrations are parts of the democratic process that are nothing out of the ordinary.
The foreign minister hopes that the current instability will not worsen and lead to any more violent incidents.
As of today, all the protesters have been gathering in the compound of Government House and insisted to continue with the rallies until the current government resigns.
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Thai court issues arrest warrants for Tuesday’s unruly anti-govt rallies
Thailand’s court has agreed with the police request to issue arrest warrants for 9 people who allegedly led Tuesday’s anti-government protests into several key state offices.
The Criminal Court today issued arrest warrants for nine leaders of anti-government rallies that broke into key state offices on Tuesday.
The police have requested for the authorization to arrest five People’s Alliance for Democracy leaders including Chamlong Srimuang, Sondhi Limthongkul, Pipop Thongchai, Somkiart Pongpaiboon and Somsak Kosaisuk as well as PAD coordinator, Suriyasai Katasila and PAD activist, Chaiwat Sinsuwong, Amorn Amornrattananont and Therdpoom Chaidee for rebellion and rebellious attempts and causing public disturbances following yesterday's unruly protests.
Previously, 82 PAD activists were already arrested for breaking into NBT's broadcast facilities.
Police charged them with colluding with armed protesters possession of and carrying firearms in public without permission.
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Central bank raises benchmark interest rate by 25 basis points
The Bank of Thailand has revised upward the policy interest rate by 25 percentage points at today’s meeting due to persistent inflationary pressure.
Assistant Bank of Thailand Governor, Duangmanee Vongpradhip, announced today the Monetary Policy Committee has decided to raise the one-day repurchase rate by 25 percentage points to 3.75%.
The MPC hopes that higher interest rate would help support Thailand’s economic growth momentum towards the end of the year.
Despite today’s rate rise, she stated that the country’s real interest rate is still in the minus of 4.8 per cent.
Duangmanee also said Thai economic growth during Q2-08 has been weaker than in the preceding three months because of lower domestic spending brought about by high inflation.
She added that even though the world oil price has been falling lately while Thai exports continued to grow the overall global economic conditions would remain quite volatile in the near future.
The committee also predicts that inflationary pressure in Thailand would remain high for some time and that presents considerable risks which need the country to keep an eye out for.
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Analysts: “BoT’s 0.25% rate rise in line with market expectations”
The Bank of Thailand’s decision to increase its policy interest rate at today’s meeting has not surprised most analysts who believe the latest rate rise will be the last for this year.
Standard Chartered Thailand’s senior economist, Ussara Vilaipitch, commented that the 25-basis-point rate rise by the Monetary Policy Committee is not a surprise for the market.
8 out of 12 analysts surveyed by Reuters News Agency before today expected the BoT to increase its key interest rate while the remaining four believed the central bank would maintain the rate at 3.5%.
Ussara said she believes today’s rate rise will be the last until the middle of next year as inflation worries would likely ease while risks of economic slowdown persist.
Tisco Securities' head of research, Poramet Tongbua, agreed that the interest rate increase was within expectations and that the 25-percentage-point rise would not have any serious effect on the country’s economic growth.
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Government economic advisor team worried about lower state liquidity
The state economic advisor team has expressed its worries over tightening liquidity in the government’s book.
State economic advisor, Narongchai Akrasanee, said that the state advisor team which is led by former Deputy PM, Virabongsa Ramagura, will meet with the economic Cabinet to discuss about how to keep the state liquidity intact during H2-08.
The Cabinet has appointed the first-ever economic Cabinet team last week to ensure its implementation of economic policies with its debut meeting taken place today.
Narongchai admitted the advisor team has detected signs of increasingly tightening liquidity of the government.
He added speedy budget disbursement before the end of the year would be a key factor to drive the Thai economy to grow further.
SET MONITOR:
Thai share prices traded higher on Wednesday led by buying into banking and property sectors.
The SET composite index went up 7 points to 675.9 with moderate volume of 9.2 billion baht or approximately 270.5 million dollars.
Foreign investors recorded the biggest net sell of almost 890 million baht which is about 26 million dollars followed by retail investors of nearly three million dollars.
Local institutions were the only net buyer of 986 million baht or 29 million dollars.
The local stock market added 1.06% as investors bought into banking and property shares after the Bank of Thailand raised its interest rate by 25 basis points.
Analysts said domestic political instability still posed pressure on local trade and led investors to take a “wait-and-see” stance.
