Wed, May 22, 2013 16:01:02 PM
Bangkok Post
Wed, May 22, 2013 16:01:02 PM
Bangkok Post
The Bank of Thailand (BoT) has kept its benchmark interest rate unchanged for a fifth straight month after the economy rebounded, resisting calls from the government for lower borrowing costs.
The central bank held its one-day bond repurchase rate at three per cent, it said in Bangkok on Wednesday afternoon. The decision was predicted by 18 of 21 economists in a Bloomberg News survey, while three expected a quarter-point cut.
The central bank has refrained from adding to its November and January rate reductions as the country recovered from its worst floods in almost seven decades. BoT governor Prasarn Trairatvorakul joins counterparts from the euro region to Japan and the United States in facing pressure from politicians to shore up growth, with Finance Minister Kittiratt Na-Ranong urging lower borrowing costs and a weaker currency.
"There is sufficient domestic growth momentum to keep the central bank from pulling the trigger at this juncture," Julia Goh, an economist at CIMB Investment Bank Bhd in Kuala Lumpur, said before the decision.
"The central bank has done a good job so far. They know best on how to manage the economy and further interference in monetary policy response would be detrimental to the central bank's independence and investor confidence."
The central bank said it is ready to adjust policy if needed. While domestic demand remains strong, exports may be weaker than expected this year, it said, adding that the current rate is appropriate for growth and inflation.
Only five members of the policy committee attended the meeting, with three voting to hold rates and two recommending a cut, the central bank said without immediately identifying them.
Excise Department deputy director-general Jitmanee Suwanpul said tax revenues this year would be lower than the target of 1.63 trillion baht.
Revenue will be short by 10 billion to 20 billion baht as a result of a substantial decline in collected corporate income tax caused by the impact of great flood late last year, Mrs Jitmanee said.
The government's tax incentive schemes, including the first-time home and first-car buyers schemes and tax breaks offered the Board of Investment were other reasons for the shortfall, she added.
"It is now certain that tax revenues will be lower than the target by 10 billion baht. The figure could reach 20 billion baht, because tax collections in the two remaining months of the 2012 fiscal year (Aug and Sept) are likely to be lower than the target," she said.
Mrs Jitmanee said the department's tax collection revenue over the past 10 months of the fiscal year (Oct 2011 to July 2012) totaled 1.23 trillion baht, 8.84 billion baht higher than the target.
Revenue from value added tax (VAT) was 16.8 billion baht higher than target and that of personal income tax was 9.81 billion baht more than the target.
However, revenue from corporate income tax was 19.4 billion baht below the target.
The Senate on Wednesday endorsed the 2.4 trillion baht 2013 budget bill with a vote of 125-7.
The bill, which was earlier passed by the House of Representatives, was approved by the Senate after 23 hours of debate.
The senate secretariat will send the bill to the prime minister, who will forward it for royal endorsement by His Majesty the King before it goes into effect.
Deputy Prime Minister Kittiratt Na-Ranong, in the name of the cabinet, thanked the Senate and promised to take its opinions and suggestions onboard for consideration.
