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Thailand Monetary Policy June 2022

Thailand: Central Bank holds policy rate steady at June meeting but hints at tightening ahead

At its 8 June meeting, the Monetary Policy Committee (MPC) of the Bank of Thailand (BoT) held the policy rate at a record low of 0.50% for the 16th consecutive meeting. The decision was not unanimous, as four of the seven members voted to maintain the policy range unchanged, while three voted to raise rates.

The Bank decided to hold rates unchanged despite higher-than-expected inflation and a robust domestic economic recovery—the factors that drove three members of the MPC to vote for a hike. The Bank expects rising tourist numbers and a robust labor market to continue supporting the economy, with its GDP growth outlook for 2022 at 3.3%, and for 2023 at 4.2%. Meanwhile, it sees inflation at 6.2% this year and 2.5% next year.

In its communiqué, the Bank changed its forward guidance; it deems rising inflationary risks and a robust economy indicate “that a very accommodative monetary policy will be less needed going forward”.

The next monetary policy meeting is scheduled for 10 August.

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