BANGKOK- A tightening of Thailand’s monetary policy will not disrupt the recovery of Southeast Asia’s second-largest economy, central bank officials said on Monday, reinforcing market expectations of interest rate hikes later this year.
Thailand’s economy will continue growing this year and next and could perform better than expected even with a greater risk that inflation will be higher than expected, Bank of Thailand (BOT) officials told an analysts’ meeting.
The central bank will try to prevent the economy from overheating and triggering demand-driven inflation, by gradually shifting from the current very accommodative policy, Assistant Governor PitiDisyatat told the meeting.
The BOT’s task is to help the economy take off smoothly, he said.
“It’s a challenge for monetary policy to release the accelerator pedal appropriately and timely so that the recovery has good momentum,” Piti said, referring to the current record low interest rate of 0.5 percent.
The speed of policy tightening would be determined by data and in line with associated risks, he said, adding the BOT had no intention of springing surprises on markets.
The BOT sees inflation of 6.2 percent this year and 2.5 percent next year and economic growth of 3.3 percent in 2022 and 4.2 percent in 2023.
The BOT has no plans to hold a special policy meeting at the moment and the remaining three scheduled meetings for this year slated for August, September and November were still appropriate, he said.
The BOT will next review policy on Aug. 10, when most economists expected a rate hike.
