Thai Central Bank Ensures Gradual Policy Adjustments Will Not Disrupt Economy

The Bank of Thailand stated that it will prevent surging inflation while easing the market concerns of aggressive rate hike by ensuring that any monetary policy adjustments in the future will be at a gradual pace and will not disrupt the economy.

The central bank said that economic recovery is clearer amid rising foreign tourist numbers at a faster pace than previously anticipated and should top this year’s expectations. Still the economic recovery is uneven as inflation risks remain high, according to the Bank of Thailand Governor Sethaput Suthiwartnarueput at a news conference on Friday.

Gross domestic production is seen higher than 3% in 2Q along with a recovered consumption.

Inflation will reach its peak in the third quarter this year. While long-term inflation expectations remain anchored, the Thai central bank expected inflation to return to a target of 2.50% next year.

The governor expected the Thai economy to return to pre-Covid level in 1Q23.


Overall factors remain as forecast and the central bank did not see the need for a special rate meeting. The bank is scheduled to meet on August 10 to discuss a rate hike from its record low of 0.50%.

As most commercial banks in the Thai stock markets reported earnings growth in 2Q22, the Thai central bank noted that the bank system remains strong and could handle future risks.

Earlier this month, a dividend payout cap for Thai commercial banks was lifted by the Bank of Thailand after a stress test revealed they could now withstand risks.