Bank of Thailand Anticipated to Raise Policy Rate to 2% Following US Federal Reserve’s Move

(CTN news) – The Federal Reserve Funds Rate just reached its all-time high, and as a result, economists predict that the Bank of Thailand (BOT) will increase its policy rate to 2% this month.

The research department at TMBThanachart Bank anticipates that the Monetary Policy Committee (MPC) will vote to increase the policy benchmark rate by 0.25 percentage points at their May 31 meeting.

After this, the rate will likely be steady for the remainder of the year as the central bank prioritizes financial stability in the face of rising prices and continued global instability.

Strong Economic Indicators and Positive Outlook Support Thailand’s Policy Rate Normalization

Headline inflation is predicted to be 2.3%, while core inflation will hit 101.5%. The recent quarter-point rate rise by the U.S. Federal Reserve is likely to affect the value of the Thai baht relative to the U.S. dollar.

According to the Kasikorn Research Centre, the central bank of Thailand would hike the benchmark rate by 0.25 percentage points this month before keeping an eye on the state of the world economy.

Before making any more changes to the policy rate, it will also keep an eye out for signs of rising risks in the U.S. banking sector.

According to the bank, the 0.25 percentage point increase predicted by Standard Chartered Bank is where this interest rate cycle will end.

Despite global uncertainty, the Bank of Thailand‘s optimistic prognosis for the Thai economy and the country’s solid economic data are expected to support the continuing normalization of the policy rate.

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