Thai central bank wants to continue interest rate normalisation: official

THAILAND’S central bank wants to continue normalising interest rates to build policy space, while a recent election and efforts to form a new government should have no bearing on monetary policy, a deputy governor said on Thursday (Jun 8).

There is no need to wait and see what policies are formulated by the parties that won the May election before deciding whether or not to raise rates further, Mathee Supapongse told reporters.

The Bank of Thailand (BOT) sees average headline inflation returning to within its target range of 1 per cent to 3 per cent in 2023.

On May 31, the central bank raised its key interest rate by a quarter point to 2.00 per cent, citing elevated core inflation.

But it said it was ready to adjust the pace and timing of policy normalisation if the outlook for growth and inflation shifted.

The central bank forecast average headline inflation at 2.5 per cent this year and 2.4 next year.

The BOT also maintains its forecasts for economic growth at 3.6 per cent this year and 3.8 per cent next year. The economy expanded 2.6 per cent in 2022. REUTERS