Thai central bank to ensure uninterrupted economic recovery

1 min read
The Bank of Thailand logo is pictured in Bangkok

By Orathai Sriring and Kitiphong Thaichareon

BANGKOK – Thailand’s economy has clearly recovered and the central bank will ensure the recovery is not interrupted by efforts to tackle higher inflation, the central bank chief said on Wednesday, amid expectations of an interest rate hike.

Economic recovery is expected to continue while the financial system remains strong and functioning normally, Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput told a business event.

The economic context has largely changed compared with during the COVID-19 crisis, so all sectors have to adapt in the face of higher inflation, policy adjustments going on in major economies and geopolitical problems, he said.

Monetary policies and measures need to be adjusted to match the economic and financial conditions and a new risk balance that gives more weight to inflation by “focusing on continual economic recovery without interruption,” Sethaput said.

The central bank is widely expected to raise its benchmark interest rate from a record low of 0.50% at its next policy review on Aug. 10. Such a hike would be the first since late 2018.

Thailand’s headline inflation hit a nearly 14-year high of 7.66% in June, well above the BOT’s target range of 1% to 3%, and BOT officials have said consumer prices have not peaked yet.

(Reporting by Orathai Sriring and Kitiphong Thaichareon; Editing by Kanupriya Kapoor)