BENGALURU- Thailand’s central bank will hold interest rates at a record low on Wednesday, and through next year, to bolster a tourism-dependent economy still struggling to get back on track as the global coronavirus pandemic continues, a Reuters poll found.
After more than a year of strict entry restrictions, southeast Asia’s second-largest economy reopened for vaccinated tourists last month. However, an expected low influx of foreign visitors will likely delay the economic recovery.
All 22 economists in the Dec. 13-17 poll unanimously predicted the central bank would hold its one-day repurchase rate at 0.50 percent at its Dec. 22 meeting. Medians showed two 25 basis point rate hikes in Q2 and Q4 of 2023, taking the benchmark rate to 1.00 percent.
“We expect the Bank of Thailand (BOT) to hike in 2023 when the recovery has gathered steam and real GDP levels at least recover to pre-pandemic levels,” said Chua Han Teng, economist at DBS Group Research.
“Policymakers are likely to remain on hold and continue supporting the fragile recovery in 2022, at a time when inflation expectations remain largely well-anchored within the central bank’s 1-3 percent target.”
Unlike some major central banks across the globe, the BOT has the luxury of keeping monetary policy loose as inflation is still inside its target range.
