First Rate Hike Since Late 2018 in Thailand… More to Come

August 10, 2022

Thailand’s central bank finally climbed on the bandwagon of interest rate normalization. A 25-basis point hike today to 0.75% was the first increase since December 2018 when the policy rate was raised from 1.50% to 1.75%. By a 6-1 vote with one policymaker preferring to kick of tightening with a move of 50 basis points, officials left no doubt that more increases lie ahead. However, their released statement opines that the process  “should be done in a gradual and measured manner.” Officials are satisfied that the growth outlook is secure enough to tolerate a less accommodative stance but also hopeful that CPI inflation, which at 7.6% currently versus 0.5% a year ago and likely to “remain at a high level throughout 2022,” will in 2023 fall gradually “into the target range as the supply-side inflationary pressures subside.”

Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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