BoT: Policy tightening will not disrupt recovery

BoT: Policy tightening will not disrupt recovery

Thailand's economy will continue growing this year and next, driven by a recovery in domestic demand and tourism, the central bank said on Monday.

Recovery had been clearer and could be better than expected while there was a greater risk inflation would be higher than projected, Bank of Thailand officials told an analysts' meeting.

Monetary policy should be adjusted in a timely manner to keep inflation expectations anchored, they said. 

A tightening of monetary policy would not disrupt the recovery of Southeast Asia's second-largest economy, the meeting was told.

The central bank would try to prevent the economy from overheating and triggering demand-driven inflation, by gradually shifting from the current very accommodative policy, assistant governor Piti Disyatat said.

The BoT's task was to help the economy take off smoothly, he said.

"It's a challenge for monetary policy to release the accelerator pedal appropriately and timely so that the recovery has good momentum," Piti said, referring to the current record low interest rate of 0.5%.

The speed of policy tightening would be determined by data and in line with associated risks, he said. The BoT had no intention of springing surprises on markets.

The BoT sees inflation of 6.2% this year and 2.5% next year and economic growth of 3.3% in 2022 and 4.2% in 2023.

The BoT has no plans to hold a special policy meeting at the moment and the remaining three scheduled meetings for this year slated for August, September and November were still appropriate, he said.

The BoT will next review policy on Aug 10, when most economists expected a rate hike. 

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