The Bank of Thailand (BoT) left its key interest rate unchanged as the Monetary Policy Committee (MPC), announced today that the MPC voted unanimously to maintain the policy rate at 0.50 percent.

The Committee assessed that the Thai economy in 2021 would expand faster than previously projected, and the recovery would continue into 2022 driven by higher merchandise exports, as well as a higher number of foreign tourist arrivals due to faster-than-expected relaxation of travel restrictions.

However, the recovery would remain fragile and uneven across sectors, especially in tourism which was below pre-pandemic levels. The Committee would monitor developments of the labor market as well as the impact of higher living costs given that income had not fully recovered.

Headline inflation in 2022 would be higher than previously assessed and could exceed the target range in the early part of the year. This would be owing to price increases in certain sectors, especially energy and raw food products. Meanwhile, upside risks to inflation increased. In particular, cost pass-through from producers to consumer prices could increase if energy and raw food prices remain elevated for longer than expected, or if the supply constraint problems broaden into other goods. 

The Committee viewed that the continued accommodative monetary policy would help support economic growth, and thus voted to maintain the policy rate. In addition, the ongoing financial and fiscal measures, with the focus on rebuilding and enhancing potential growth, would play an important part in bolstering the robust recovery of the labor market as well as the income of businesses and households.

Monetary Policy Committee’s Decision 1/2022 (bot.or.th)

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