BANGKOK : Thailand’s rate committee raised its key interest rate late last month and said further monetary tightening will be gradual and measured, but can be adjusted if necessary, minutes of the meeting showed on Wednesday.
On Nov. 30, the Bank of Thailand’s (BOT) monetary policy committee voted unanimously to raise the one-day repurchase rate by a quarter point to 1.25 per cent to curb inflationary pressures. It will next review policy on Jan. 25, when most economists predict a further hike.
The committee assessed that headline inflation would decline and return to the central bank’s target range of 1 per cent to 3 per cent in the second half of 2023, the minutes said.
The BOT has raised the key by a total 75 basis points since August. The tightening cycle has been less aggressive than many of its regional peers as Thailand’s economic recovery has lagged that of other Southeast Asian countries, with its crucial tourism sector only starting to pick up this year.
“The Thai economic recovery would continue to gain traction, with tourism and private consumption as key drivers that would help lessen the impact of the global slowdown,” the minutes said.
At the rate meeting, the central bank forecast the economy would grow 3.2 per cent this year and 3.7 per cent in 2023, down from previous forecasts of 3.3 per cent and 3.8 per cent, respectively.
Last year’s growth of 1.5 per cent was among the slowest pace of growth in the region.
(This story has been refiled to add central bank as the source of forecast in paragraph 6)