BOT tells Thai commercial banks to push interest rates up gradually
The Thai central bank has asked commercial banks not to rush in pushing up interest rates after it raised the policy interest rate by 0.25 percentage point on Wednesday.
Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput said on Thursday that it was common for commercial banks to follow suit, but that the central bank wanted to see gradual increases in interest rates to reflect the current situation.
“There is no set target on how much the interest rate should be, or how many increases there should be. That rather depends on the timing and context suitable for Thailand,” Sethaput said.
He said that interest rate increases are based on factors such as core inflation, adding that the country’s monetary policy could be revised in the future if that was necessary.
Thailand’s inflation rate recently rose to 10 per cent.
The BOT’s Monetary Policy Committee on Wednesday resolved to increase the policy interest rate from 0.75 per cent to 1 per cent, with immediate effect. Shortly afterwards, some commercial banks adjusted upward their interest rates for deposits and loans.
Sethaput said on Thursday that the Thai economy is recovering continuously this year due to the upturn in domestic demand, consumption and tourist arrivals, although a global economic recession may have an adverse impact on exports.
The BOT predicted a growth of 3.3 per cent for the Thai economy this year and 3.8 per cent next year, as inflation is expected to decline to “manageable levels” next year.