Thailand Monetary Policy September 2022


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

September 28, 2022

At its 28 September meeting, the Monetary Policy Committee (MPC) of the Bank of Thailand (BoT) hiked the policy rate to 1.00% from 0.75%. The move marked the second consecutive increase and was unanimous.

The Bank decided to tighten its stance further due to elevated inflation. The BoT expects inflation to come in at 6.3%, on average, in 2022 before returning to the 1.0–3.0% target band in 2023. Next year, the Bank expects inflation to average 2.6%, thanks to easing supply-side pressures and falling oil prices. Space for the hike was provided by a solid economic recovery, fueled by household spending and a rebounding tourism sector.

In its communiqué, the Bank stated that “the policy rate should be normalized in a gradual and measured manner to the level that is consistent with sustainable growth in the long term”. This implies further hikes, in line with our panelists’ expectations.

The next monetary policy meeting is scheduled for 30 November.

FocusEconomics Consensus Forecast panelists currently project the policy rate to end 2022 at 1.08% and 2023 at 1.67%.

Author: Massimo Bassetti, Senior Economist

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