Bank of Thailand "stands ready" to take action if need to cool housing prices
POSTED: 22 Apr 2013 7:40 PM
Bank of Thailand Governor, Prasarn Trairatvorakul, told Channel NewsAsia he had recently held talks with major developers and mortgage lenders to express concern about the strength of the market.
SINGAPORE: The Bank of Thailand (BOT) said it "stands ready" to take action to cool housing prices, should the need arise.
BOT Governor, Prasarn Trairatvorakul, told Channel NewsAsia he had recently held talks with major developers and mortgage lenders to express concern about the strength of the market.
The central bank refrained from taking any action, but the Governor said it is keeping its options open.
Mr Prasarn said: "These things are dynamic, let me tell you we are monitoring and I cannot guarantee that this is it, it will stay forever. You notice that in the past we used to introduce certain measures. Now if the situation changed, if the situation calls for it, we stand ready.”
He said he did express concern at the very low rates given on starter loans, and told bank executives to keep a close eye on their mortgage lending practices.
Although he regards these as "marketing gimmicks", he said he had issued a verbal warning to banks to avoid "over-competition" in this area.
The Governor also expressed concern about the speed of appreciation of the Thai baht.
He said the change was largely due to inflows of money from Japan, a result of the Bank of Japan's super-easing monetary policy.
"When you are overstretching the (monetary policy) instrument you are bound to face something unexpected. At the moment, you see how this spill over around the world has caused lots of problems, distortions around the financial markets,” he said.
The Governor added that weaker in the Japanese yen was benefiting the Thai manufacturing sector, because of its close ties with Japanese industry.
- CNA/ck
- wong chee tat :)
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