Narrower inflation-target range agreed

Caretaker Finance Minister Suchart Thadathamrongvech yesterday said he would forward the core inflation target to the Cabinet.

While inflationary pressure has eased since oil prices recently dropped sharply, Suchart said the raising of the minimum end of the targeting range was aimed at preventing deflation next year. Targeting zero inflation could induce a recession, he added.

In a separate matter, Tarisa yesterday informed the Finance Ministry that the central bank could not allocate soft loans to support small and medium-sized businesses via commercial banks, as this is against the new law governing the Bank of Thailand.

Suchart said he would consult caretaker Deputy Prime Minister Olarn Chaipravat on how to provide financial support to small firms.

Meanwhile, caretaker Deputy Finance Minister Pradit Pataraprasit has assigned the state-owned Small and Medium Enterprise Development Bank of Thailand to provide loans to SMEs.

Suchart said there was room for the Finance Ministry to raise funds via government bonds to provide finance for industrial support.

He added that he had appointed a committee responsible for choosing a new board for the central bank. The committee is chaired by Panas Simasathian, former permanent secretary for finance.