Bank of Thailand holds rates unchanged

Updated 10 January 2013
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Bank of Thailand holds rates unchanged

BANGKOK: Thailand's central bank left its benchmark interest rate unchanged at 2.75 percent yesterday, as expected, saying the global economy continued to recover while growth this year could be higher than thought and inflation was stable.
The central bank said its seven-member Monetary Policy Committee (MPC) unanimously agreed to hold the one-day repurchase rate for the second straight meeting after a surprise quarter-point cut in October.
All 14 economists polled by Reuters had expected no change in the policy rate as Southeast Asia's second-biggest economy is holding up despite global problems.
There is no consensus among economists on the rate outlook for this year, with inflation and credit growth a concern for some but global risks remaining more important for others.
The Bank of Thailand (BOT) said growth in the fourth quarter of 2012 would probably turn out higher than expected, leading it to expect higher growth rates in 2012 as a whole and in 2013.
"Private consumption and investment continued to be the key growth drivers, supported by consumer and business confidence, favorable household income, full employment as well as accommodative monetary conditions with continued high rates of credit growth," the central bank's statement said.
"The export sector showed incipient signs of a broadbased recovery while the service sector and tourism expanded robustly," it said.
Radhika Rao with Forecast in Singapore said: "Accompanying comments give us the sense that the authorities might shift focus to the need to maintain financial stability by way of restraining strong household debt, credit growth and inflows."
Other economists agreed, although Santitarn Sathirathai at Credit Suisse said: "There's no need for the BOT to take action on rates, but it may think about prudential measures to handle household debt if needed."
Some economists are worried about inflation because of a jump in minimum wages plus strong credit growth.
"There have been tentative signs of a turnaround in external demand. Domestically, the pro-growth policies have already translated into strong private consumption numbers over the last few quarters. Coupled with the hike in minimum wages, price pressures are likely to continue building," said Eugene Leow of DBS Bank in Singapore.
A daily minimum wage of 300 baht ($ 9.80) was rolled out across the country on Jan. 1. That meant an increase of up to 35 percent depending on the province, after a nationwide jump of 40 percent last April.
The economy has remained resilient despite global problems because strong domestic demand, as Thailand recovered from floods in late 2011, has helped offset weakness in exports.
Growth in the final quarter of 2012 is bound to be very high compared with a year before due to the low base, economists and officials say.
Given global uncertainty and generally tame inflation, policymakers across Asia have been keeping monetary policy loose to support their economies.
South Korea left interest rates on hold for a second straight month in December after two cuts.
Indonesia has left its policy rate unchanged since February, saying the rate was consistent with low inflation, although it may need to tighten soon to support its currency.
Thailand's central bank has forecast economic growth of 4.7 percent in 2013 after 5.8 percent for 2012. Due to the floods, growth in 2011 was only 0.1 percent.
It has predicted that exports, which are equal to more than 60 percent of GDP each year, will grow 9 percent in 2013 after 4.4 percent in 2012. Thailand is a regional hub and export base for top global car makers and other manufacturers.
Bank of Thailand Assistant Gov. Paiboon Kittisrikangwan told a briefing that the latest wage rises should have only a small impact on inflation.
The BOT has forecast headline inflation of 2.8 percent for 2013, with core inflation, which strips out food and energy prices, at 1.7 percent, well within its target range of 0.5-3.0 percent, which guides monetary policy.
It releases new economic forecasts on Jan. 18.


Power-sucking Bitcoin ‘mines’ spark backlash

Updated 54 min 8 sec ago
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Power-sucking Bitcoin ‘mines’ spark backlash

  • Local US authorities pushing back against bitcoin miners as power prices rise
  • Firms insist they bring revenue, investment and talent to mining locations

NEW YORK: Bitcoin “miners” who use rows of computers whirring at the same time to produce virtual currencies began taking root along New York’s northern border a couple of years ago to tap into some of the nation’s cheapest hydroelectric power, offering an air of Silicon Valley sophistication to this often-snowy region.
But as the once-high-flying bitcoin market has waned, so too has the enthusiasm for bitcoin miners. Mining operations with stacks of servers suck up so much electricity that they are in some cases causing power rates to spike for ordinary customers. And some officials question whether it’s all worth it for the relatively few jobs created.
“We don’t want someone coming in, taking our resources, not creating the jobs they professed to create and then disappear,” said Tim Currier, mayor of Massena, a village just south of the Canadian border, where bitcoin operator Coinmint recently announced plans to use the old aluminum plant site for a mining operation that would require 400 megawatts — roughly enough to power 300,000 homes at once.
In Plattsburgh, where two cryptocurrency operations have been blamed for spiking electricity rates, the prospect of more cryptocurrency miners plugging in spooked officials enough in March to enact an 18-month moratorium on new operations. The small border village of Rouses Point also is holding off on approving new server farms and Lake Placid is considering a moratorium.
For local officials, the power struggle has been a crash course in the esoteric bitcoin mining business in which miners earn bitcoins by making complex calculations that verify transactions on the digital currency’s public ledger.
Since it often uses hundreds of computers that throw off tremendous heat and burn a lot of power, it has tended to gravitate toward cooler places with cheap electricity, such as geothermal-rich Iceland or along the Columbia River region of Washington state.
The stretch of New York near the Canadian border similarly fits the bill. Cheap hydropower from a dam spanning the St. Lawrence River is doled out by a state authority to local businesses that promise to create jobs. Additionally, some municipalities such as Massena and Plattsburgh receive cheap electricity from a separate hydropower project near Niagara Falls.

 

In Plattsburgh, electricity is so cheap most residents use it instead of oil or wood to heat their homes. The couple of commercial cryptocurrency mines here can get an industrial rate of about 3 cents per kilowatt hour — less than half the national average.
But Plattsburgh Mayor Colin Read said its largest operator, Coinmint, which has two plants employing 20 or fewer people, can consume about 10 percent of Plattsburgh’s 104 megawatt cheap electricity quota. When the city exceeded its allocation like it did this winter, customers ended up paying $10 to $30 more a month for the extra electricity. For a major employer like Mold-Rite Plastics plant, it cost them at least $15,000 in February.
State regulators have since given municipal utilities the ability to charge higher rates to cryptocurrency miners. At least one bitcoin miner in Plattsburgh says he’s working with the city on solutions to the power worries.
Ryan Brienza, founder and CEO of the hosting company Zafra, said those could include mining on behalf of the city for an hour a day or harnessing the heat from mining computers to warm up large spaces.
While the direct number of jobs associated with mines can be small, Brienza said they can bring revenue, investments and talent to the city while employing local contractors.
“It can start snowballing,” Brienza said.
Coinmint’s plans for a new plant in Massena, for example, come with a promise of 150 jobs. That’s welcome in an area that in the past decade has suffered though the loss of aluminum-making jobs and the closure of a General Motors powertrain plant.
“J-O-Bs. Yup. What we need up here,” said Steve O’Shaughnessy, Massena town supervisor.
Coinmint had asked for a cheap power allocation from the New York Power Authority for Massena for part of its energy needs, but that request was deferred.
The power authority has separately enacted its own moratorium on allocating hydropower to cryptocurrency operations — mirroring municipalities that have effectively pushed the “pause” button on a rush of miners coming in.
Coinmint representatives said this month they hope to begin the Massena operation in the second part of this year. The company stressed that mines can be a good fit for this job-hungry area.
“They’re also going to get substantially more efficient over time,” said Coinmint spokesman Kyle Carlton. “So to the extent that Plattsburgh or Massena or anybody else can get in on that and establish themselves on the ground floor, I think that’s going to help those cities to be successful.”

Decoder

Bitcoin mining is the process used to verify transactions and add them to the currency's public ledger (blockchain). It involves compiling pending transactions and turning them into a computationally difficult, mathematical puzzle. The first computer to solve the puzzle claims a transaction fee and a newly-released bitcoin.