Bank of Thailand raises benchmark interest rate for fourth straight year to curb rising inflation

The Bank of Thailand on January 25, 2023 decided to raise the benchmark interest rate by another 0.25%, bringing the total interest rate to 1.5%. This is the fourth consecutive increase in benchmark interest rates in the past six months to counter inflation, which remains high in the country. The increase in the benchmark interest rate will continue gradually Until inflation falls to the target set by the Bank of Thailand, which is expected to be achieved by the end of 2023. According to the Bangkok Postតិ៍។

The secretary-general of the Bank of Thailand's Monetary Policy Committee said the rate hike would be short-lived, appropriate for the Thai economic environment. However, the committee will also consider setting ratesLong-term money at upcoming meetings as well. The Bank of Thailand will continue to gradually raise its benchmark interest rate in 2023 until average inflation falls to its target by the end of 2023, he said.

Although inflation in Thailand eased slightly from a high of 7.86% in August to 5.89% in December, it is still far from the central bank's target. Only 1% to 3%.

In August 2022, the Bank of Thailand raised interest rates for the first time in nearly four years to 0.75% to address rising inflation. The benchmark rate hike was made in September, November and January.

The Monetary Policy Committee said the Thai economy was projected to continue to grow through a boom in tourism, which helped revive the economy quickly, especially the return of Chinese tourists. This will contribute to better employment and income in the sector and support the growth of private consumption.

The Bank of Thailand has not released its latest forecast for inflation and economic growth, but the secretary of the Bank of Thailand's Monetary Policy Committee has claimed that the Thai economy could recover close to the pre-Kovid 19 plague. And will continue to grow in 2024.

The Thai Tourism Authority expects to receive 4 million Chinese and 25 million foreign tourists by 2023. However, this number is still lower than in 2019, before the 19-Kovid eruption, which received a total of 39 million visitors.

Central banks in Southeast Asia have focused on tighter monetary policy to counter rising inflation. Indonesia raised its benchmark interest rate to the highest level last week since July 2019.