BoT mulls raising interest rate in H2

The Bank of Thailand may raise the interest rate by a quarter point in the second half of the year to bridge the yield gap between US government and Thai government bonds amid soaring domestic inflation, says Chavinda Hanratanakool, chairwoman of the Association of Investment Management Companies (AIMC).

Mrs Chavinda said the Federal Reserve is expected to tighten its monetary policy, reduce bond purchases and raise interest rates to 3.5% by the end of the year, causing volatility in the global stock market.

The yield gap between US government and Thai government bonds increased by almost 2%, causing outflows from the Thai bond market.

Coupled with the expectation that the global economy may enter a recession, stock markets remain risk-off during this period, she said.

Many central banks, especially those in emerging markets, have raised interest rates to curb…