Thailand Central Bank Delivers First Rate Hike Since 2011
(Bloomberg) -- Thailand’s central bank raised its benchmark interest rate for the first time since 2011, joining peers in the region in tightening monetary policy this year.
Five of the seven committee members at the meeting voted to raise the one-day bond repurchase rate to 1.75 percent from 1.5 percent, the Bank of Thailand said in a statement on Wednesday. Two voted for the rate to be kept unchanged.
- Fourteen of 19 economists surveyed by Bloomberg correctly predicted the move, given signals by policy makers in recent weeks highlighting the risks stemming from a prolonged period of low rates. The rest expected no change
- While growth slowed to a two-year low of 3.3 percent last quarter, the Bank of Thailand still expects the economy to expand more than 4 percent this year. Inflation remained subdued at less than 1 percent in November, below the central bank’s target zone
- Other central banks in Asia had raised rates this year, including in Indonesia and the Philippines
- The baht has been among the most stable currencies in Asia, little changed against the U.S. dollar this year, compared to large declines in the Philippine peso and Indonesian rupiah
- The nation will hold an election in February after more than four years of military rule
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