US federal rate hike has only short-term impact on Thai economy

The Finance Ministry says yesterday's US Federal Reserve’s interest rate hike will have only short-term effects on Thai monetary and capital markets.

Somchai Sujjapongse, permanent secretary for Finance, said an increase of 0.25 points in the U.S. fed-funds rate would have only slight and short-term impact on Thai markers as the Thai economy remains fundamentally strong.

He said the federal rate hike had been expected in advance and was considered  normal.

The permanent secretary also dismissed concerns over impact on Thailand as he is confident that the Bank of Thailand and relevant agencies will be able to cope with possible exchange rate volatility caused by the rate hike in the U.S.

He added that the current Thai baht is neither weak nor strong for now, but the private sector is advised to hedge against exchange rate risk amid fluctuations.