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Byline: Wichit Sirithaveeporn
May 1--Conflict over interest rates between the government and commercial banks is causing volatility in the bond market, local experts said.
Sommai Phasee, a deputy finance permanent secretary, cautioned that government intervention could undermine efforts to develop the bond market.
Prime Minister Thaksin Shinawatra has been locked in a war of words with local banks in recent weeks over interest-rate policies.
With excess liquidity in the money markets ranging up to 600 billion baht, local banks have cut savings rates as low as 1.25 percent, compared with prime lending rates of around 7 percent .
Source: HighBeam Research, Interest-Rate Spat Clouds Bond Market, Thailand Experts Say.