BANGKOK (Bloomberg) -- Thailand’s central bank is poised to deliver another rate increase in line with an unwavering post-pandemic tightening strategy despite rapid disinflation and political gridlock.
Bank of Thailand will raise the benchmark one-day repurchase rate by 25 basis points to 2.25% on Wednesday, the highest level since January 2014, according to 19 of 21 economists surveyed by Bloomberg. The rest forecast a hold for the first time in a year.
Thailand’s policymakers continue to telegraph hawkish signals even after inflation cooled faster than most regional peers that have already paused tightening, or in the case of Vietnam already pivoted to rate cuts. Authorities are banking on tourism revival and firmer economic rebound to counter risks from delayed government formation.
Governor Sethaput Suthiwartnarueput (pic) last month said there’s no need to abruptly adjust the BOT’s "gradual and measured” policy normalization approach, even after overall inflation approached zero in June from 7.9% in August last year.
"Core inflation pressures, while easing, are still higher than levels seen in the past,” said Lavanya Venkateswaran, a senior economist at Oversea-Chinese Banking Corp. in Singapore.
"The near-term growth outlook remains supported by strong tourism inflows,” she said, expecting the BOT to pause at 2.25%.
