The Bank of Thailand’s Monetary Policy Committee agreed unanimously on Wednesday to raise the key interest rate by 25 basis points, to 1.50%, with immediate effect.
The central bank said in its statement that the Thai economy is continuing to recover, thanks to private sector consumption and the Chinese government allowing its citizens to travel abroad, adding that, although exports are contracting, they are expected to rebound next year.
Inflation, in general, has slowed, but there is still a risk that it may increase, due to the economic recovery and increased production costs, said the central bank, adding that a consistent and gradual increase in interest rate is the appropriate approach.
The central bank still supports financial institutions in the provision of refinancing services to small and medium-sized enterprises (SMEs) and targeted groups of householders, according to the statement.
The central bank will continue to monitor developments in the monetary market and foreign exchange fluctuations and will adjust the key interest rate consistent with inflation and the economic outlook, said the statement.