Thai central bank hikes key interest rate, trims growth outlook

BANGKOK  – Thailand’s central bank raised its key interest rate by 25 basis points for a fifth straight meeting on Wednesday as it attempts to bring inflation back within target while its economic recovery gathers steam against rising global headwinds.

The Bank of Thailand’s (BOT) monetary policy committee voted unanimously to raise the one-day repurchase rate to 1.75 percent , as widely expected in a Reuters poll.

The central bank cut its headline inflation forecast for 2023 to 2.9 percent from 3 percent , and expected it to return to within target in the middle of this year.

The BOT projected economic growth of 3.6 percent this year and 3.8 percent next year, compared with previous forecasts of 3.7 percent and 3.9 percent , respectively.

It said persistently high inflation remained a risk and the baht currency was highly volatile and global economic uncertainty had increased. Thailand’s financial systems were resilient, it added.

“The committee thus decided to increase the policy interest rate to normalize the monetary policy stance in a gradual and measured manner toward a level consistent with long-term sustainable growth,” the BOT said in a statement.

It said the committee was ready to adjust the size and timing should the growth and inflation outlook shift.

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