Bank of Thailand (BOT) Assistant Governor Piti Disyatat stated that the current benchmark interest rate of 2.5% is “quite robust to many scenarios” and reiterated the central bank’s commitment to maintaining a stable inflation rate.
The government has been advocating for a rate cut to stimulate the economy. The Monetary Policy Committee recently kept the key interest rate at 2.50%, the highest over a decade, with the next review scheduled for August 21.
Piti explained that the committee aims for a neutral rate and emphasized that monetary policy alone cannot drive economic growth. The Bank of Thailand (BOT) forecasts economic growth of 2.6% this year, potentially reaching 3% if the government’s handout scheme is implemented. Last year’s growth was 1.9%.
The central bank maintains that its inflation target range remains consistent with economic fundamentals. In May, headline consumer inflation returned to the BOT’s target range of 1% to 3% for the first time in a year, a positive sign for economic stability.
Piti acknowledged the government’s proactive stance on managing inflation and highlighted that the central bank is working to keep inflation well anchored, targeting an underlying inflation momentum over the medium term, similar to other central banks worldwide.
The BOT forecasts headline inflation at 0.6% in 2024, with Piti emphasizing that inflation does not disrupt households and businesses. (NNT)
