BUSINESS BoT hints at gradual hikes for policy interest rates

BoT hints at gradual hikes for policy interest rates

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BANGKOK (NNT) – The Bank of Thailand (BOT) has said any increase in its benchmark interest rate to rein in above-target inflation would be gradual as the economy faces a slow recovery and a weakening of the country’s currency. baht.

The BOT is one of the few major Asian central banks that has kept rates at record lows since the pandemic began, but recently marked a change in policy as inflation rose to a nearly 14-year high in May.

Senior Director Sakkapop Panyanukul told a trade seminar that headline inflation will remain high this year, but should return to the BOT’s target range of 1-3% in the second quarter of 2023.

rising inflation

The BOT forecasts inflation of 6.2% this year and 2.5% next, and economic growth of 3.3% in 2022 and 4.2% in 2023.

Sakkapop also said that the second largest economy in Southeast Asia is expected. to return to its pre-pandemic level of growth late this year or early next. He added that the baht had weakened fairly quickly and would be more volatile, fueled by rapidly rising US interest rates.

Signs of capital outflows

The senior director noted that there were “clearer signs of capital outflows” in June, adding that the central bank “would deal with the baht if the market moves beyond fundamentals.”

Information and source

  • Reporter: Natthaphon Sangpolsit
  • Rewriter: Paul Rujopakarn
  • National News Office: http://thainews.prd.go.th

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