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BANGKOK: Thailand raised its key interest rate today by 0.25 percentage points to 1.25 per cent with immediate effect following today’s Bank of Thailand (BoT) Monetary Policy Committee (MPC) meeting to curb rising inflation.

This is the third consecutive 25 basis points increase for a total of 75 basis points since August.

In a statement, BoT said headline inflation is expected to be higher than the previous projection for 2023 due to domestic energy prices and is expected to decline and return to the target range within 2023.

“The committee deems that a gradual policy normalisation remains an appropriate course for monetary policy given the growth and inflation outlook, and thus votes to raise the policy rate by 0.25 percentage point at this meeting,” it said.

BoT said Thailand’s economy is projected to continue growing at 3.2 per cent in 2022, 3.7 per cent in 2023, and 3.9 per cent in 2024.

“The tourism sector continues to strengthen as the number of foreign tourists continues to rise,” it said.

The central bank said tourism and private consumption would continue to be key economic drivers going forward and help alleviate the impact of a global slowdown on the Thai economy.

Meanwhile, BoT said headline inflation is expected to be at 6.3 per cent this year, peaking in the third quarter, before declining to 3.0 per cent in 2023 and 2.1 per cent in 2024.

It said headline inflation is expected to be higher than previously assessed for 2023 on the back of the upward adjustment of electricity charges.

“Inflation is expected to return to the target range by the end of 2023.

“Medium-term inflation expectations remain anchored within the target range. However, the committee will continue to closely monitor risks to inflation, especially a potential increase in cost pass-through as well as domestic energy prices, which remain uncertain,” it added.

BoT said MPC would continue to monitor the heightened uncertainties surrounding the global economy closely.

“The committee is ready to adjust the size and timing of policy normalisation should the growth and inflation outlook shift from the current assessment,” it said.-Bernama

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