BANGKOK (Reuters) – Thailand’s rate committee stuck by a pledge that monetary tightening would be gradual and measured, but noted it could be adjusted should the growth and inflation outlook shift from assessments, minutes of the meeting showed on Wednesday.
Monetary policy would face greater challenges in the period ahead, given a tradeoff between tackling inflation at a time of rising demand-side inflationary pressures amid an improving economic outlook and supporting the economic recovery where some businesses and households remained fragile, the minutes said.
On Jan. 25, the Bank of Thailand’s monetary policy committee voted unanimously to raise the one-day repurchase rate by a quarter point to 1.50% to try to bring inflation back within target.
It will next review policy on March 29, when economists forecast a further rate hike.
The committee viewed that the economy would continue to expand as tourism and private consumption continued to gain traction thanks to the return of Chinese tourists, the minutes said.
The committee assessed that inflationary risks had increased and warranted close monitoring, the minutes said.
While headline inflation would continue to decline, “there was a risk that core inflation would stay high for longer than expected”, the minutes said.
Headline inflation cooled to its lowest rate in nine months of 5.02% in January, but was still well above the central bank’s target range of 1% to 3%.
(Reporting by Orathai Sriring; Editing by Ed Davies)
