BANGKOK, Sept 27 — The Bank of Thailand (BOT) unexpectedly raised its key interest rate by 0.25 per cent to 2.50 per cent, the highest in a decade, in a bid to curb surging inflation.
In a statement, BOT said the monetary policy should aim to keep inflation sustainably within the target range, foster long-term macro-financial stability, and ensure sufficient policy space given the uncertain outlook.
The committee thus voted unanimously to raise the policy rate by 0.25 percentage points for an eighth straight meeting on Wednesday.
“The committee deems the current policy interest rate to be appropriate for supporting long-term sustainable growth.
“In deliberating monetary policy going forward, the committee will take into account growth and inflation outlook, including upside risks from government economic policies,” it said.
Meanwhile, BOT cut its economic growth forecast to 2.8 per cent this year compared to 3.6 per cent earlier. However, it raised its 2024 growth outlook to 4.4 per cent from 3.8 per cent.
“Growth this year softened somewhat from a delayed recovery in merchandise exports and tourism, weighed by subdued growth in China and the global electronic cycle.
“Growth should, however, pick up in 2024 from domestic demand, underpinned by a steady tourism recovery and a turnaround in merchandise exports, with additional support from government policies,” it said.
Meanwhile, BOT expects the arrivals of foreign visitors at 28.5 million this year and 35 million next year, slightly down from previous forecasts.
BOT also lowered its projection for headline inflation to 1.6 per cent this year and 2.6 per cent in 2024.
“Government living-cost subsidies and a high base last year would keep inflation low for the rest of 2023.
“Core inflation should rise from 1.4 in 2023 to 2.0 per cent in 2024.
“The committee is attentive to the upside risks to inflation, stemming from possible demand-side pressures related to government economic policies and higher food prices should the El Nino phenomenon intensify,” it said.
— Bernama
