The Bank of Thailand (BOT) has confirmed that key interest rates will continue to rise until the economy grows at its full potential and inflation returns to target, with gradual policy normalization still appropriate.
The central bank said in a statement issued for an analysts’ meeting that monetary tightening globally has had a limited impact on the nation’s financial conditions.
The outlook for Thailand’s economy and inflation have been in line with expectations, but the BOT said it is ready to adjust the pace of further rate hikes if the outlook shifts.
BOT Assistant Governor Piti Disyatat told the meeting that the economy is expected to fully recover in the second half of 2023, when inflation should also return to within the target range of 1-3%. He added that the rate committee would decide the terminal rate based on the economy in the second half of 2023.
The BOT has raised its key rate by a total of 75 basis points in three meetings since August, from a record low of 0.5%. It will next review policy on January 25, when economists expect a further hike.
The assistant governor also noted that slowing global economic growth should not have a big impact on foreign tourist numbers as most of them are from Asia, where economies are still doing well. (NNT)