He said inflation was an issue of concern as the central bank’s target for headline inflation was in the range of 35 per cent.
The rate hike might not be able to contain inflation if oil prices surge further, he said.
Government increases in pay for civil servants and politicians and also rises in minimum wages, combined with record low unemployment, could also pull inflation up, Kitti said.
He also expected that the central bank might introduce more measures – such as adjusting loantovalue (LTV) ratios as it did late last year. An LTV ratio of 90 per cent is to be enforced starting this month for condominiums worth less than Bt10 million and will be enforced starting January next year for detached houses, townhouses and other lowrise residential buildings. The LTV means that homebuyers will have to make down payments, as they will not be able to get the full purchase price of a house from a bank.
The LTV ratio in the United States is 80 per cent. It is even lower, at 5060 per cent, in Seoul, he said. So Thailand might need to come closer to the international standard, but it was likely to be a gradual process and not done this year.
Kitti was among the speakers at a seminar on realestate financing at the Queen Sirikit Centre in Bangkok yesterday.

Methee Supapong, director of the Bank of Thailand’s domestic economy department, said interest rates were on a rising trend. He gave an assurance that the central bank would raise its policy rate, currently at 2.25 per cent, gradually to allow consumers to adjust.
As the Thai economy recovery continues it also pulls inflation up, Methee said.
He said the latest LTV measure was only a signal for house developers and bankers to be careful about the realestate market.
“So far we do not detect any realestate bubble,” he said.
Samma Kitsin, directorgeneral of the Real Estate Information Centre, forecasts that new mortgages this year may total about Bt300 billion, down from last year’s estimated Bt330 billion to Bt340 billion. New lending may be close to the amount lent in 2009, which was quite reasonable after the market sharply increased last year.
Issara Boonyung, president of the Housing Business Association, said it would be healthy if residential units sold this year could match last year’s 170,000.

Source:nationmultimedia.com

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