Thailand Monetary Policy November 2022


Thailand: Central Bank hikes rates further in November; hints at further tightening ahead

December 1, 2022

At its 30 November meeting, the Monetary Policy Committee (MPC) of the Bank of Thailand (BoT) hiked the policy rate to 1.25% from 1.00%. The move marked the third consecutive increase and was unanimous.

The Bank decided to tighten its stance further due to elevated inflation and a continued economic recovery. Growing tourist numbers and stronger household spending amid rising wages and employment are factors in the latter. The BoT expects inflation to come in at an average of 6.3% in 2022, well above the 1.0–3.0% target band. Next year, the Bank expects inflation to average 3.0%, owing to easing supply-side pressures and falling oil prices. It sees the economy expanding 3.2% this year, 3.7% in 2023 and 3.9% in 2024.

In its communiqué, the Bank stated that “the policy rate should be normalized to the level that is consistent with sustainable growth in the long term in a gradual and measured manner”. This implies further hikes, in line with our panelists’ expectations. However, it added that due to heightened uncertainty surrounding the global economic backdrop, it stood ready to “adjust the size and timing of policy normalization.”

Commenting on the decision, Enrico Tanuwidjaja, economist at UOB, stated:

“We revised our view for another two 25 bps back-to-back rate hikes, to 1.75%, in January and March 2023 monetary policy meetings and remained at that level for the rest of next year.”

The next monetary policy meeting is scheduled for 25 January.

FocusEconomics panelists predict that the one-day repurchase rate will end 2023 at 1.95% and 2024 at 1.91%.

Author: Massimo Bassetti, Senior Economist

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Thailand Monetary Policy Chart

Thailand Monetary Policy November 2022

Note: One-day repurchase rate in %.
Source: Bank of Thailand (BoT).

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