Thailand: An extra rate hike is expected in March – UOB

Economist at UOB Group Enrico Tanuwidjaja assesses the lates interest rate decision by the Bank of Thailand (BoT).

Key Takeaways

“The Bank of Thailand (BoT) voted unanimously to raise the policy rate by 25bps to 1.50%. This is its fourth hike in the current cycle and the first for 2023.”

“BoT deemed that risks of demand-side inflationary pressures amidst strong recovery of the Thai economy warrants close monitoring and specifically mentioned that the policy rate should be normalized to the level that is consistent with long-term sustainable growth. However, BoT further mentioned that in so doing, a gradual and measured path remain preferred course.”

“Based on today’s MPC decision, we keep our view for one final 25bps rate hike in Mar to 1.75% and for BoT to hold at that level for the remainder of this year to anchor inflation expectations and arrest possible runaway inflation risks without undermining growth recovery trajectory.”

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