Thailand again ups policy rate by 25 bps to help contain inflation

By Toni Weeks

San Diego, Aug. 24 - The Monetary Policy Council of the Bank of Thailand said it decided to raise its policy interest rate by 25 basis points to 3½% at its meeting on Wednesday. Five members voted to raise the rate, with two voting against the increase.

The council said in a press release that the Thai economy has retained its growth momentum, and domestic consumption and investment are expected to expand due to favorable employment conditions, improved confidence, robust growth in credit demand and fiscal stimulus. However, because of increased inflation expectations and a subnormal policy rate, policy rate normalization should be continued to contain inflationary pressure.

The council voted unanimously to raise the rate by 25 bps to 3¼% on July 13 and by 25 bps to 3% on June 1. The council also voted by six to one to raise the rate by 25 bps to 2¾% at its meeting on April 20.

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