Thailand May Hold Rates as Asia Gauges Risks From China to Oil

This article describes the effects that China’s oil situation is having on other countries, including Thailand. The oil situation is a sign of a potential economic slowdown in China. In response, Thailand is planning to keep its interest rates where they are. The reason for this is because higher energy costs boost inflation risks, which in turn reduce the scope for “monetary stimulus” that could counter a Chinese clowdown and Europe’s economic slump. Already this year, Thailand’s currency, the baht, which is one of the weakest currencies in Asia right now, has increased 2 percent. This is interesting because it shows just how dependent other Asian countries are on China. In the case of some smaller countries such as Thailand, they must plan their economy around that of another country.


March 19 2012


http://www.businessweek.com/news/2012-03-19/thailand-may-hold-rates-as-asia-gauges-risks-from-china-to-oil 


Josh Thompson