Thailand’s central bank raised its key interest rate for the first time in nearly four years; lifting it by a quarter point as expected to fight surging inflation as the economic recovery gains momentum.
The Bank of Thailand (BOT), which had been among Asia’s least hawkish central banks, finally joined most of its peers; in raising rates as consumer inflation hovers near 14-year highs, though it stressed further hikes will be gradual.
One member voted to raise the rate by 0.50 percentage points, saying that would reduce the risk of having to increase the rate aggressively later on and adding that such an increase would not significantly affect the recovery.
Seventeen of 20 economists surveyed by Reuters had expected a quarter-point hike, with the remainder predicting a half-point rise.
“The Thai economy is to continue recovering with strong momentum” from higher-than-expected foreign tourism, Piti Disyatat, secretary of the MPC, said in a statement.