BANGKOK – Thailand’s commercial banks should not rush to raise their interest rates even though the central bank will tighten monetary policy, the finance minister said on Wednesday.
The Bank of Thailand is widely expected to raise its key rate for the first time in nearly four years later on Wednesday.
The economy remains strong and can cope with any wage increases later this year, Arkhom Termpittayapaisith told reporters.
“Banks have been urged not to rush to raise interest rates because the economy has yet to fully recover because of tourism,” he said.
The vital tourism sector has just picked up this year following an easing of COVID-19 curbs and entry procedures.
As the pandemic crisis eases, Thailand has to normalise its polices, he added.
Exports, a key driver of Thai growth, will continue to rise, also benefiting from a global food crisis, Arkhom said.
Recent baht strength will not affect shipments as much but is good for oil imports, he added. The baht was trading around its six-week high against the dollar on Wednesday.
(Reporting by Kitiphong Thaichareon; Writing by Orathai Sriring; Editing by Kanupriya Kapoor, Martin Petty)