Interest rate set to rise, but uncertain recovery clouds timing

Thailand’s policy interest rate will have to rise but the timing will hinge on the monetary policy committee’s view with the economy growing below its potential and the recovery facing uncertainty, the Bank of Thailand (BoT) board chairman said on Wednesday.

The comment was one of the first public remarks by a BoT official on tightening monetary policy since the central bank’s monetary policy committee (MPC) left its key rate at a record low of 0.50% in May 2020 after three cuts that year to mitigate against the impact of the Covid-19 pandemic.

“The rate has dropped to 0.50% and the next trend will have to go up… but it depends on when the MPC deems it…