The Bank of Thailand has raised its key interest rate to a nine-year high of 2.25% due to concerns about rising prices.
Key Takeaways The Bank of Thailand raised its key interest rate to 2.25%, citing concerns about upside risks to prices and the need to ensure inflation stays low in the long term. Despite easing inflation and a forecasted steady economic expansion driven by tourism and private consumption, policymakers remain cautious due to weak exports, domestic political uncertainty, and the potential impact of a severe El Nino episode on food prices. The central bank expects inflation to rebound in the second half of the year after temporary factors dissipate, but analysts believe this rate hike will likely be the last for now, considering the downside risks to growth and subdued inflation.
Despite inflation easing and falling below the central bank’s target, policymakers aim to ensure it remains low. The central bank expects the economy to continue growing, driven by tourism and private consumption, but warns of risks from weak exports and political uncertainty.
They anticipate a…
Bank of Thailand raises key interest rate to highest level in nine years
